Leslie's, Inc., the pool and spa supplies retailer, and its subsidiaries filed chapter 11 petitions on September 30 in the U.S. Bankruptcy Court for the Southern District of Texas. Its 8-K, the form public companies file with the SEC to report major events, says it closed approximately 76 stores.
What was filed
The petitions aim to carry out a plan agreed in advance with lenders holding about 81.1% of the term loan principal. If the court approves, which the 8-K says it had not, the company would get a $90.0 million term loan and a $225.0 million asset-based credit line that absorbs its existing one, both lent during bankruptcy, and lenders would buy $60.0 million of new equity. The release cites a cut of about $685 million, or 90%, of funded debt.
Stores and customers
The 8-K says the company approved a streamlining plan September 27, closed approximately 76 stores it called under- or non-performing on September 29, and expects to vacate them within two weeks; it cannot yet estimate the charges. The release says all other stores remain open. Exhibit 99.2's lender slides, not to be relied on as a prediction, the company says, assume "Up to 200 planned store closures contemplated in ch. 11"; they do not say whether that includes the 76.
The release says gift cards and loyalty benefits will continue to be honored, and that first-day motions, once approved by the court, will let it maintain customer programs. The company's Our Future page says returns and exchanges continue under existing policies and commercial orders are still being fulfilled. None of these lists the closed stores or the remaining count, or covers product warranties.
Shares and ownership
Nasdaq told the company September 25 that its bid price had closed below $1.00 for 30 straight business days, with no compliance period because of a reverse split within a year. Unless the company requests a hearing by October 2, Nasdaq will suspend trading October 6 and file to delist. It does not currently intend to appeal and expects OTC trading, without assurance.
The plan would cancel all existing shares for no payment; the company says equity holders "may experience a significant loss on their investment if the Plan is confirmed." New equity would go 55.80% to lenders buying the $60.0 million placement, 30% to bankruptcy term lenders for debt beyond a $75 million exit loan, 10% to existing term loan holders and 4.20% as a backstop fee, before employee and director incentive awards of up to 10%.
The dates
The agreement counts its deadlines from the filing; the company and required lenders can waive or extend them. By this desk's count, with weekend and holiday deadlines moved to the next business day as the agreement provides: interim financing order by October 5, plan filing October 20, final financing order November 4, confirmation January 8, 2027, effective date January 19, 2027. It aims to emerge in early 2027.