Thrasio Hands Lenders Control After $495M Debt Cut
The chapter 11 restructuring of Amazon brand aggregator Thrasio handed control of the reorganized company to its first lien lenders, cancelled a preferred and common equity stack carrying a liquidation preference of about $2.518 billion, and routed general unsecured creditors to a litigation trust the plan built to pursue the company's founders and early executives. Thrasio Holdings, Inc. and 240 affiliated debtors filed chapter 11 on February 28, 2024 in the U.S. Bankruptcy Court for the District of New Jersey before Judge Christine M. Gravelle, with a restructuring support agreement already signed by first lien lenders and a plan of reorganization filed the same day. The court confirmed the plan on June 13, 2024, and Thrasio emerged on June 18 after eliminating about $495 million of debt.
Funded debt of approximately $855.2 million sat beneath the preferred equity liquidation preference, and confirmation valuation evidence placed the reorganized enterprise below the secured debt, leaving all equity out of the money. The litigation vehicle, the Thrasio Legacy Trust, held claims the plan preserved against a defined group of founders and early executives rather than releasing them, and in December 2025 the trust reached a $65 million settlement of those claims for general unsecured creditors.
| Debtor(s) | Thrasio Holdings, Inc. (241 jointly administered entities) |
| Court | U.S. Bankruptcy Court, District of New Jersey |
| Case Number | 24-11840 |
| Judge | Hon. Christine M. Gravelle |
| Petition Date | February 28, 2024 |
| Confirmation Date | June 13, 2024 |
| Effective Date | June 18, 2024 |
| Funded Debt | Approximately $855.2 million |
| DIP Facility | $360 million ($90M new money; $270M roll-up) |
Ask the docket what happened, who is involved, and what comes next.
Prearranged Filing and the Restructuring Support Agreement
Thrasio executed a restructuring support agreement before the petition date with holders of about 81% of its revolving credit loans and 88% of its term loan, representing roughly 81.1% of total first lien debt. The First Day Declaration states the agreement required the debtors to pursue an expedited reorganization through a pre-packaged or pre-negotiated plan, and the debtors filed their original plan and disclosure statement on the petition date alongside the 241 voluntary petitions.
The ad hoc first lien group was represented by Gibson, Dunn & Crutcher as counsel, Evercore as financial advisor, and Sills Cummis & Gross as local counsel, with the group's holdings detailed in its Rule 2019 statement filed February 29, 2024. The lender support fixed the case economics and milestones in advance, and the plan was confirmed roughly three and a half months after filing.
DIP Financing and the 40% Equity Exit Fee
The DIP financing motion sought a $360 million superpriority facility composed of $90 million in new money and a $270 million roll-up of prepetition first lien loans, a structure reported at filing. Wilmington Savings Fund Society served as DIP agent and Royal Bank of Canada as prepetition administrative agent. New money loans priced at SOFR plus 8.00% cash pay, roll-up loans at SOFR plus 10.00% PIK, with a 2.00% original issue discount on new money and a 1.00% monthly extension fee. The initial maturity ran four months from closing, extendable monthly up to four additional months and subject to acceleration on milestone defaults, case conversion or dismissal, or the plan effective date.
The facility's most consequential term was the DIP Exit Fee. Under the final DIP order, DIP lenders were entitled to 40% of the reorganized company's new common stock, diluting the equity otherwise distributed to first lien lenders and subject only to further dilution by the management incentive plan. The DIP granted priming liens on substantially all assets and superpriority administrative claims, subject to a professional fee carve-out and adequate protection for diminution in collateral value.
The interim order, entered March 1, 2024, authorized $35 million of new money and a $35 million roll-up. The final order, entered April 4, 2024, authorized the remaining $35 million of new money and a $235 million roll-up, plus a $20 million delayed draw available at confirmation. GXO Logistics Supply Chain filed a limited protective objection to the final DIP order over adequate protection for its position as a third-party warehouse operator.
| DIP Term | Detail |
|---|---|
| Total facility | $360 million superpriority |
| New money | $90 million (SOFR + 8.00%, cash pay) |
| Roll-up | $270 million (SOFR + 10.00%, PIK) |
| Fees | 2.00% OID on new money; 1.00% monthly extension fee |
| Equity exit fee | 40% of new common stock to DIP lenders |
| Maturity | Four months, extendable monthly up to four months |
Capital Structure and the Preferred Equity Overhang
The First Day Declaration shows funded debt of approximately $855.2 million under a first lien credit agreement with Royal Bank of Canada as administrative and collateral agent: $66.2 million of drawn revolving loans, $2.5 million of letters of credit, and a $786.5 million term loan, all secured by first-priority liens.
Above the funded debt sat a preferred equity liquidation preference of approximately $2.518 billion across Series X redeemable preferred and Series Seed, A, B, C, and D preferred stock, bringing total funded debt and preferred equity to roughly $3.374 billion. Common equity sat at the bottom of the stack.
The size of the preferred layer left equity out of the money. Centerview's confirmation valuation evidence, presented in the Whit Graham declaration, placed the reorganized enterprise value at approximately $470 million to $650 million, with a $560 million midpoint, below the $855.2 million of first lien debt. The same declaration put implied total equity value at roughly $140 million to $320 million, with a $230 million midpoint. Graham testified that estimated enterprise value did not exceed the secured claims outstanding on the petition date, which underpinned the plan's cancellation of all preferred and common equity.
| Capital Structure Item | Amount |
|---|---|
| Revolving loans | $66.2 million |
| Letters of credit | $2.5 million |
| Term loan | $786.5 million |
| Total funded debt | $855.2 million |
| Preferred equity liquidation preference | Approximately $2.518 billion |
| Total funded debt + preferred | Approximately $3.374 billion |
Pandemic Overexpansion and the Inventory Overhang
Founded in 2018 by Carlos Cashman and Joshua Silberstein, Thrasio built an Amazon-focused aggregator that acquired and scaled consumer-product brands, growing to more than 350 contract manufacturers and a portfolio spanning thousands of products by the petition date. Both founders later surfaced as targets of the estate's preserved litigation claims. The First Day Declaration attributes the filing to a pandemic-era demand surge that drove expensive inventory purchases and warehouse buildout, followed by normalized demand. Thrasio estimated about $425 million of excess inventory at the end of 2022 and had sold down only 28% of roughly $700 million of excess inventory through prepetition restructuring initiatives.
Fixed costs compounded the problem. The company accumulated more than 200 warehouse leases at peak, reduced to about 129 before filing, and relied on more than 40 third-party logistics providers against an industry norm of two or three, alongside a supplier base cut from 1,300 to 350. The declaration also cites unprofitable non-core brand acquisitions and heavy reliance on the Amazon marketplace as factors that depressed margins. Thrasio implemented an operational reset with AlixPartners, and had already begun layoffs and named Greg Greeley CEO in 2022.
Coverage of the filing noted that the pandemic e-commerce surge moderated as shoppers returned to in-person retail, pressuring Amazon-focused sellers. The stress extended across the aggregator sector, where pandemic-era valuations, floating-rate debt, and slower e-commerce growth drove restructurings and bankruptcies among Thrasio and other consolidators, including SellerX and Benitago. At its peak the company raised more than $3 billion and reached a valuation of up to $10 billion in October 2021.
Plan Structure, the Legacy Trust, and the Excluded Parties
The first amended plan organized claims into 13 classes on a non-consolidated basis. First lien claims (Class 3) were allowed at $855.2 million in principal and received their pro rata share of 100% of the new common stock, subject to dilution by the 40% DIP Exit Fee, a backstop payment, and the management incentive plan. General unsecured claims (Class 4) received 100% of the Thrasio Legacy Trust Interests, split evenly between non-deficiency unsecured holders and first lien deficiency claim holders. All preferred stock series (Classes 5 through 10) and common equity (Class 11) were cancelled with no distribution.
| Class | Claims/Interests | Treatment |
|---|---|---|
| 3 | First Lien Claims | 100% of new common stock, subject to dilution |
| 4 | General Unsecured Claims | 100% of Thrasio Legacy Trust Interests |
| 5–10 | Preferred stock (Series X, Seed, A–D) | Cancelled; no recovery |
| 11 | Common Stock | Cancelled; no recovery |
Both impaired voting classes accepted. The vote tabulation declaration recorded Class 3 first lien claims voting $854.9 million in favor with no rejections across 153 ballots, and Class 4 general unsecured claims voting $382.0 million of $385.1 million in favor, 169 ballots to 14.
The plan incorporated a settlement with the official committee of unsecured creditors that established the Thrasio Legacy Trust as the vehicle for general unsecured recoveries. The plan funded the trust with $5 million in cash and no obligation for further funding, vested it with all causes of action not released under the plan, and governed it through a committee of two lender designees, two committee designees, and a trust administrator.
The trust's value turns on the Excluded Parties, a defined group whose claims the plan preserved rather than released. The confirmation order identified the Excluded Parties as co-founders Joshua Silberstein and Carlos Cashman and former executives Joseph Falcao, Daniel Boockvar, Mounir Ouhadi, and Aditya Rathod, together with transferees in the Yardline Capital transactions between April 2020 and January 2022, including Ari Horowitz. Claims against these parties became Vested Causes of Action assigned to the Legacy Trust. The plan bounded that group through a Cooperating Parties mechanism: certain individuals who signed Cooperation Agreements committing to assist the investigation and prosecution of the vested claims could avoid Excluded Party designation, and the trust's $5 million in initial cash funding carried no obligation for further contributions from the Reorganized Debtors.
Contested Releases, the Gatekeeper, and the Silberstein Appeal
The U.S. Trustee objected to the plan, arguing the non-consensual third-party releases were impermissible under Third Circuit law, the exculpation provisions were overbroad and not limited to estate fiduciaries, and the gatekeeper provision functioned as an improper injunction. The court overruled the objection at confirmation and approved the gatekeeper as appropriately tailored.
Co-founder Joshua Silberstein, who had departed the company, filed a limited objection challenging releases granted to post-departure insiders, the vesting of an undefined universe of claims against him through the Excluded Parties designation, and restrictions on his separation agreement and D&O coverage. He argued the claims vested against him exceeded the findings of the independent investigation report. The court overruled the objection, and Silberstein remained an Excluded Party.
Under the confirmation order, entities that opted out of releases must obtain a final order before suing a Released Party, but the Legacy Trust may pursue Excluded Parties without prior court approval. Silberstein filed a notice of appeal on June 27, 2024 and later moved to stay the confirmation order pending appeal, arguing he faced irreparable harm if the Legacy Trust could sue him while the gatekeeper blocked his own third-party claims. The available filings do not record a merits ruling on the appeal; instead, Silberstein was named as a defendant in the Legacy Trust's adversary proceeding and is among the parties exchanging mutual releases under the December 2025 settlement, which resolved the trust's claims against him on a consensual basis.
Adversary Proceeding 24-01637 and the $65 Million Settlement
After emergence, the Thrasio Legacy Trust, acting through its trustee Meta Advisors, LLC, commenced adversary proceeding No. 24-01637, Meta Advisors, LLC v. Joshua Silberstein, et al., before Judge Gravelle to prosecute the Vested Causes of Action. The defendants were the Excluded Parties — the co-founders and former executives identified in the confirmation order — together with affiliated transfer vehicles Everything's Coming Up Millhouse, LLC, Cashman Family Investment II, LLC, Hudson Palm LLC, and Yardline Capital Corp.
Under the proposed settlement, the defendants agreed to pay the trust $65 million, exchange mutual releases with the trust, and withdraw all proofs of claim they had filed in the case. The trust filed the settlement notice on December 30, 2025, and no party objected: a certificate of no objection followed on January 21, 2026, and the approval hearing was adjourned to March 24, 2026.
The $65 million recovery contrasts with the roughly $250,000 distribution initially proposed for general unsecured creditors. A Morrison & Foerster summary reported that the committee's probe yielded $65 million for unsecured creditors. Rather than releasing the founders and early executives, the plan preserved estate claims against them in the trust, which then monetized those claims for general unsecured and first lien deficiency claim holders.
The post-emergence claims process remained active into 2026 while the trust pursued and settled the vested claims. The Legacy Trust twice extended the deadline to object to general unsecured claims, pushing it from June 2025 to December 2025 and then seeking a further extension to June 2026 while it monetized the causes of action. The Reorganized Debtors opened a renewed omnibus claims objection process in March 2026, and a March 2026 stipulation resolved claims filed by Swiftline Corp., Ari Horowitz, and Tomo Matsuo, disallowing the unsecured portions with no trust distribution, consistent with the settlement's proof-of-claim withdrawal term, as Horowitz was also a settling defendant.
Professionals, Fees, and Leadership Transition
The court approved approximately $31.0 million in professional fees for the petition-to-effective-date period. Kirkland & Ellis, as lead debtor counsel, received $10.9 million; Morrison & Foerster, as committee counsel, $8.1 million; Katten Muchin Rosenman, as special counsel, $4.3 million; Province, as committee financial advisor, $3.9 million; and Centerview Partners, as investment banker, $2.2 million. Cole Schotz served as New Jersey co-counsel, Kurtzman Carson Consultants as claims agent, and AlixPartners as restructuring advisor.
Leadership turned over during the case. CEO Greg Greeley and five other senior executives, including CFO Josh Burke, departed in April 2024, and former COO Stephanie Fox was named CEO at emergence. Thrasio filed its notice of effective date on June 18, 2024, confirming emergence with first lien lenders holding the reorganized equity. Fox was later succeeded by David Johnson as CEO in November 2024.
Key Timeline
| Date | Event |
|---|---|
| February 28, 2024 | Voluntary petitions filed for 241 debtors |
| March 1, 2024 | Interim DIP order entered |
| April 4, 2024 | Final DIP order entered |
| April 24, 2024 | CEO and five senior executives depart |
| June 4, 2024 | First amended plan filed |
| June 13, 2024 | Plan confirmed |
| June 18, 2024 | Effective date; Thrasio emerges |
| June 27, 2024 | Notice of appeal of confirmation order filed |
| December 30, 2025 | Legacy Trust files notice of $65 million settlement (Adv. 24-01637) |
| January 21, 2026 | Certificate of no objection to settlement filed |
| March 2026 | Reorganized Debtors open renewed omnibus claims objection process |
Frequently Asked Questions
When did Thrasio file for chapter 11 and where?
Thrasio Holdings and 240 affiliated debtors filed chapter 11 petitions on February 28, 2024 in the U.S. Bankruptcy Court for the District of New Jersey, before Judge Christine M. Gravelle. The court confirmed the plan on June 13, 2024, and the company emerged on June 18.
How much DIP financing did Thrasio obtain?
The DIP facility totaled $360 million, comprising $90 million of new money and a $270 million roll-up of prepetition first lien loans. DIP lenders were also entitled to a DIP Exit Fee equal to 40% of the reorganized company's new common stock.
What did creditors recover under the plan?
First lien lenders received 100% of the new common stock, subject to dilution by the DIP Exit Fee, a backstop payment, and the management incentive plan. General unsecured creditors received 100% of the Thrasio Legacy Trust Interests, and all preferred and common equity was cancelled. Recoveries for unsecured creditors turned on the trust's claims against the Excluded Parties, which the trust resolved through a $65 million settlement filed in December 2025.
What is the Thrasio Legacy Trust?
The Legacy Trust is a litigation vehicle established under the plan and funded with $5 million in cash. It holds the Vested Causes of Action against the Excluded Parties, a group that includes the co-founders and certain former executives, and distributes any recoveries to general unsecured claim holders.
Who is the claims agent for Thrasio?
Kurtzman Carson Consultants LLC, now operating as Verita Global, was appointed claims and noticing agent effective the petition date and maintains the official claims register. It tabulated the plan votes and supported the post-emergence omnibus claims objection process that the Reorganized Debtors and Legacy Trust have continued into 2026.
ElevenFlo's coverage of comparable consumer-brand and trust-driven restructurings includes Instant Brands' Instant Pot sale and Corelle emergence, Ascena Retail Group's GUC trust wind-down, Ultinon Motion's collapse into a litigation trust, and First Brands Group's liquidating plan after a $2.3 billion fraud collapse.
This article was researched and written with AI assistance, using court filings, public records, and news sources. AI-generated content can contain errors. Verify all information against primary sources before relying on it. This is not legal or financial advice. Read our full disclaimer.