Portrait Innovations, Inc.

Portrait Innovations confirmed its Second Amended Joint Chapter 11 Plan just over three months after filing on September 1, 2017, turning a pre-negotiated lender-backed case into a fast reorganization rather than a liquidation. The Charlotte-based portrait-studio operator entered Chapter 11 after traffic declines at lifestyle and power-center locations, 63 prepetition studio closures, roughly 240 hourly job cuts, and a failed capital search; it still operated 119 studios in 31 states with about 590 employees. Its capital stack included about $15 million of senior secured notes held by CapitalSouth Partners SBIC Fund III, CapitalSouth Partners Fund II, and CapitalSouth Partners Florida Sidecar, plus about $2.2 million of unsecured debt and an estimated $4.4 million of lease-rejection exposure source filing.

The confirmed plan repays DIP claims in full from $7 million of exit financing, creates a $925,000 GUC Fund, issues $12 million of five-year secured New Notes, and gives the winning bidder preferred equity with a $2.75 million notional amount plus 100% of the common equity. The order found that impaired Classes 3 and/or 4 accepted the plan, approved the release, exculpation and injunction framework, and authorized the restructuring transaction, asset vesting, new governance documents, new notes, new shares, and exit financing needed to put the reorganized company in place source filing source filing.