In a statement released yesterday after Alex and Ani’s bankruptcy filing, the company’s chief restructuring officer and interim CEO, Robert Trabucco, made clear he expected the company to go on. Its stores will remain open, as will its website, he said. And while Alex and Ani is putting itself up for sale, if that doesn’t work, it has in place a restructuring support agreement (RSA).

“The company will pursue a stand-alone restructuring backed by [its lenders and equity holders] contemporaneously with the sale process in the event that the sale process is unsuccessful,” according to Trabucco’s first-day declaration.

If there’s no buyer—and majority owner Lion Capital is owed at least $115 million, so that would likely be the minimum sale price—then the RSA kicks in. In which case, the company’s new ownership will include one of the more colorful players from the Alex and Ani saga (which has had more than its share).

Under the RSA, an entity called Bathing Club LLC, which appears to be a New York–based company that owns the Capri Southampton hotel, will buy founder and former CEO Carolyn Rafaelian’s share of the company, as well as some first-lien credit.

The controlling member of Bathing Club is Mark Geragos, the high-profile celebrity attorney who’s represented everyone from Michael Jackson to Jussie Smollett to Winona Ryder to Scott Peterson, and who has also occasionally served as Alex and Ani’s outside counsel. (He did not serve as counsel for the company’s bankruptcy case.)

Bathing Club will control about 35% of the company, says Joshua A. Sussberg, a partner with Kirkland & Ellis, counsel for Alex and Ani.

Lion Capital, which currently owns around 59%, will own the remaining the 65%, and the consortium of lenders will be gone.

While Geragos has been described as Rafaelian’s “business partner and lawyer”—and according to a story in Medium, he was once considered a de facto part of the company’s leadership—his presence doesn’t mean Rafaelian will come back.

The RSA includes a confidential settlement of Rafaelian’s current litigation against the company. (Last year, a New York court ruled she owed the company $5 million; she paid the money, but is currently appealing that decision.)

The settlement calls for her to resign from the company’s board of managers, and is neutral on her future involvement.

“Rafaelian shall be free to make proposals to provide the company with new product design and manufacturing services under a new contract,” the settlement said. However, the company “is under no obligation to negotiate with Ms. Rafaelian or reach any agreement with her.”

It also notes: “Ms. Rafaelian intends to operate a new business venture in the jewelry industry and may do so following her resignation from her position on the board of managers.”

In October 2020, Rafaelian released an Instagram video that said she was no longer designing for Alex and Ani. Her new company, which appears to still be in the formative stages, is called Metal Alchemist.

The settlement with Rafaelian is intended to stay in place, even if a buyer comes in and supplants the RSA, Sussberg says.

So with many (but not all) of the company’s issues behind it, the job is to get the once-formidable brand back on track.

Lion Capital principal Lyndon Lea tells JCK: “We are hopeful that Alex and Ani will emerge from these proceedings, unencumbered with liabilities that it is unable to support in a post-COVID world, well-positioned to build on Carolyn’s initial vision of authenticity and spirituality.”

Alex and Ani is indeed a great brand, with a sizable following, known for its “positive energy.” We’ll see if it can get past its tumultuous recent history and again enjoy positive momentum.

(Photo courtesy of Alex and Ani)

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