Apparel maker Cherokee Inc. has emerged from Chapter 11 bankruptcy protection after reducing its debt from about $90 million to about $30 million.
It was the second time in less than two years that the Sunland company has emerged from a bankruptcy reorganization.
The just-completed reorganization plan called for holders of Cherokee's $76.6 million in 11% subordinated notes to exchange them for new Cherokee common shares equal to about a 90% stake in the company. Also under the plan, holders of unsecured trade debt received about 8% of the company shares and former Cherokee shareholders were left with about 2%.
Cherokee's new shares, which began trading last week, closed at $2.25 a share on Thursday. That compares with the Friday before the company emerged from Chapter 11 reorganization, when Cherokee common stock closed at just six cents a share.