The Lycra Company is now in a post-confirmation wind-down and fee-application phase after confirming and substantially consummating a prepackaged restructuring that used chapter 11 to delever a maturing capital structure rather than run a sale. The debtors filed on March 17, 2026 with a prepetition deal already in hand, citing roughly $1.5 billion of funded debt, March 31 maturities across the ssTL, Euro Notes and Dollar Notes, weakening operating performance, and broad creditor support for a plan designed to eliminate about $1.2 billion of funded debt through new debt, equity and warrants, as described in the Dean Williams first-day declarationDkt. 12.
The case was built around a fast prepackaged plan and a bridge financing package. On the petition date, the debtors filed a joint plan that left ordinary-course unsecured claims unimpaired, gave ssTL lenders new holdco notes and common stock, gave Euro Noteholders Class A warrants, gave Dollar Noteholders Class B warrants, paid the promissory note class a nominal cash distribution, and canceled existing holdco equity without recovery under the chapter 11 planDkt. 16. In parallel, they sought a $75 million superpriority DIP notes facility, with $50 million available on an interim basis, a $25 million final tranche, a 9.00% PIK rate before extension, budget controls, minimum liquidity protections, and plan milestones targeting confirmation within 60 days and effectiveness within 75 days subject to a short regulatory extension through the DIP financing motionDkt. 13.
The financing path has been fully approved. The court entered interim DIP authority on the petition date, including the initial $50 million draw, priming liens, adequate protection, a 15% disbursement-variance covenant, and a $30 million minimum liquidity threshold through the interim DIP orderDkt. 67. Final DIP approval followed on April 21, 2026, authorizing the full $75 million facility, confirming superpriority status and lien protections, preserving the September 13, 2026 initial maturity framework, and carrying forward the cash-collateral and adequate-protection package in the final DIP orderDkt. 221.
The current docket posture is no longer centered on financing or plan prosecution. Recent final fee applications state that the First Amended Joint Prepackaged Plan was confirmed on May 7, 2026 and became effective and substantially consummated on May 20, 2026, with professionals now seeking final compensation for work through the confirmation period, including tax structuring, DIP-budget compliance, exit financing, plan litigation, and implementation work in filings such as the Grant Thornton final fee applicationDkt. 321 and the Linklaters final fee applicationDkt. 315.
