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Tuesday Morning Files For Chapter 11 Bankruptcy Protection - Quick Facts

Off-price retailer Tuesday Morning Corp. (TUES) on Wednesday filed voluntary petitions for protection under Chapter 11 of the Bankruptcy Code in the U. S. Bankruptcy Court for the Northern District of Texas, Dallas Division. It plans to emerge as a stronger company by early fall 2020.

The company said it will pursue financial and operational reorganization designed to allow it to reduce its outstanding liabilities and strengthen its overall financial position.

These actions are in response to the immense strain the COVID-19 pandemic and related store closures have put on the business.

Haynes and Boone, LLP is serving as legal advisor, Miller Buckfire, a Stifel company, is serving as financial advisor, and AlixPartners, LLP is serving as restructuring advisor to Tuesday Morning.

To enable the company to continue operations during the reorganization process, it has obtained a commitment from its existing lender group to provide $100 million of debtor-in-possession (DIP) financing.

As required by the DIP agreement, the company is required to obtain a commitment for up to $25 million of additional financing, which the Company is negotiating.

Following the closure of the entire store portfolio as a result of COVID-19, Tuesday Morning has re-opened over 80% of its existing store footprint to date and expects to continue store re-openings and bringing associates back to work over the coming weeks.

The company expects the reorganization process to enable it to realign its store footprint. It also expects to close approximately 230 of its 687 stores to focus on high-performing locations and will do this with a phased approach.

Further, Tuesday Morning plans to attempt to renegotiate a significant number of leases during this process. Of the remaining 555 stores, the Company plans to exit approximately 100 additional locations leaving a go-forward footprint of approximately 450 stores.

Since Tuesday Morning began re-opening its stores on April 24, 2020, comparable store sales for the reopened stores have been approximately 10% higher than sales during the same period in fiscal 2019, and over 7,300 associates have returned to work.

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