The Container Store Group (TCS) Files Chapter 11

On December 21, 2024, The Container Store Group (NYSE: TCS) and certain of its domestic subsidiaries (collectively with the Company, the “Debtors”) entered into a Transaction Support Agreement (the “Transaction Support Agreement”) with certain holders of over 90% of the total claims arising under the Company’s senior secured term loan credit facility (the “Consenting Term Lenders”), and certain stockholders of the Company, including Green Equity Investors V, L.P., Green Equity Investors Side V, L.P. and TCS CO-INVEST LLC. In accordance with the terms of the Transaction Support Agreement, on December 22, 2024 (the “Petition Date”), the Debtors commenced voluntary cases (the “Chapter 11 Cases”) under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of Texas, Houston Division (the “Bankruptcy Court”), providing for a court-administered reorganization pursuant to a prepackaged joint plan of reorganization (the “Plan”).

The Company’s material relationships with certain parties are described under “Policies and Procedures for Related Person Transactions” beginning on page 52 of the Company’s definitive proxy statement filed with the Securities and Exchange Commission on July 9, 2024, which description is incorporated herein by reference.

In accordance with the Transaction Support Agreement, the parties have agreed to support, approve, implement and enter into definitive documents to effect the transactions contemplated by the Plan, including a restructuring of the Company’s outstanding debt. If confirmed by the Bankruptcy Court, the Plan would implement a series of transactions that would result in, among other things, all issued and outstanding shares of the Company’s common stock being canceled and extinguished without consideration being provided to holders of such common stock. Following the effective date of the Plan (the “Plan Effective Date”) and consummation of the transactions contemplated thereby, the Company has agreed to terminate its reporting obligations under the Exchange Act and intends to continue as a private company.

Pursuant to the Transaction Support Agreement, the Debtors have agreed to use commercially reasonable efforts to meet several milestones in connection with the Chapter 11 Cases, including, among others, (a) having the Bankruptcy Court enter the order confirming the Plan (the “Confirmation Order”) no later than 34 calendar days following the Petition Date, and (b) consummating the transactions under the Plan and having the Plan Effective Date occur no later than 14 calendar days following the entry of the Confirmation Order. However, there can be no assurance that the foregoing milestones will be met on such dates, if at all.

The Transaction Support Agreement also contains certain customary representations, warranties and other agreements by the parties thereto. The transactions contemplated by the Transaction Support Agreement, including the Plan Effective Date, are subject to and conditioned upon, among other things, approval of the Plan by the Bankruptcy Court.

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