Lunya Company, a Los Angeles-based sleepwear brand operating under the Lunya and Lahgo labels, is a reorganized Subchapter V debtor whose First Amended Plan was confirmed in November 2023 and went effective that same month, with the reorganized debtor now administering a court-approved modification of that plan. The case has moved from a compressed five-month confirmation track into post-effective-date plan implementation rather than further contested restructuring.

The filing followed a pandemic-era boom-and-bust cycle. Founded in 2012 by Ashley Merrill, Lunya rode the loungewear surge to peak revenue of roughly $50 million in 2020-2021 before revenue contracted to about $35 million in 2022 and fell a further 29% year-over-year in the first quarter of 2023. CEO Blair Lawson's first-day declaration attributes the distress to inventory overordering in 2020, iOS 14-driven digital marketing disruption, and persistent losses across the company's seven retail stores, which were generating roughly $135,000 in monthly losses, and the company sought Chapter 11 protection on June 16, 2023 to reject unprofitable leases in Atlanta, Houston, and San Francisco and restructure outside of going-concern distress (Chapter 11 Voluntary PetitionDkt. 1).

Lunya's prepetition capital structure was concentrated in two unsecured facilities totaling $27 million extended by the founder's affiliated trust: $20 million in convertible notes and a $7 million revolving line of credit, both from the Merrill Living Trust, alongside roughly $6 million in trade and credit card obligations and no secured funded debt at filing (Declaration of Blair Lawson in Support of First Day ReliefDkt. 13). To bridge to confirmation, the debtor obtained a $700,000 superpriority priming term-loan DIP facility from the Merrill Living Trust together with cash-collateral usage authority, with the plan's effective date structured as a DIP maturity event. The debtor filed its First Amended Subchapter V Plan on October 11, 2023, which the court confirmed on November 6, 2023 and which became effective on November 21, 2023 (Subchapter V Debtor's First Amended Plan of ReorganizationDkt. 170).

Post-confirmation, the case has centered on plan performance rather than further restructuring litigation. In March 2024 the court authorized the reorganized debtor to modify the confirmed plan, and the debtor subsequently filed a Second Plan Supplement disclosing an executed revolving credit agreement with Assembled Brands to support the modified plan's exit financing. With no contested sale process, no creditor committee, and a claims docket dominated by founder-affiliated debt, Lunya's case reflects a consensual, founder-led Subchapter V recapitalization of an e-commerce-heavy apparel business rather than an operational liquidation.