" class="no-js "lang="en-US"> Loyalty Ventures Inc. Announces Bankruptcy Filings
Wednesday, March 22, 2023
City Week 2023

Loyalty Ventures Inc. Announces Bankruptcy Filings and Plan to Delist from the Nasdaq Global Select Market

 Loyalty Ventures Inc. (the “Company”) and certain of its subsidiaries filed voluntary petitions for relief 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 (the “Bankruptcy Court”). In addition, earlier today, LoyaltyOne, Co. (“LoyaltyOne”), a subsidiary of the Company, sought protection under the Companies’ Creditors Arrangement Act (Canada) (the “CCAA”) with the Ontario Superior Court of Justice (the “Canadian Court”).

In connection with the CCAA proceedings, LoyaltyOne filed motions seeking Canadian Court approval under the CCAA of a sale and investment solicitation process (“SISP”). Under the SISP, interested parties would be invited to participate in a sale process in accordance with the SISP procedures. Concurrent with the issuance of this press release, Bank of Montreal (TSX: BMO) (NYSE: BMO), and its subsidiaries BMO Financial Corp. and BMO Harris Bank N.A (together, “BMO”), announced BMO’s entry into a purchase agreement with LoyaltyOne pursuant to which BMO will acquire LoyaltyOne’s AIR MILES Reward Program (AIR MILES) business. The consummation of the sale transaction is conditioned upon LoyaltyOne not receiving a more favorable offer from another party in accordance with the SISP, and other customary closing conditions.

The Company believes that BMO’s acquisition of AIR MILES would secure the program and better position AIR MILES to continue delivering its leading loyalty program to nearly 10 million Canadian collectors.

In connection with the chapter 11 cases, the Company has filed customary motions authorizing it to proceed with its operations in the ordinary course. Subject to approval of the Canadian Court, LoyaltyOne, as borrower, will enter into a debtor-in-possession (“DIP”) facility with an affiliate of BMO, as lender, pursuant to which the lender will make available to LoyaltyOne a non-revolving secured credit facility in the amount of $70 million. Subject to the approval of the Bankruptcy Court and the Canadian Court, the Company, as borrower, and LoyaltyOne, as lender, will enter into an intercompany DIP facility. The Company currently expects that the intercompany DIP facility will provide sufficient liquidity to meet its financial obligations during the duration of the chapter 11 cases.

The decision to file for chapter 11 was made after a careful evaluation of the Company’s financial situation and a determination that it is in the best interests of the Company and its stakeholders. For more information on the chapter 11 cases and the CCAA proceedings, please read the Company’s Current Report on Form 8-K, filed with the U.S. Securities and Exchange Commission (the “SEC”) today. The Company’s SEC filings are available publicly on the SEC’s website at www.sec.gov.

For Bankruptcy Court filings and other additional information related to the chapter 11 cases available from time to time, please see https://cases.ra.kroll.com/LVI, a website administered by Kroll Restructuring Administration LLC, the Company’s third-party bankruptcy claims and noticing agent.

The Company also announced today its intention to voluntarily delist its common stock, par value $0.01 per share (the “Common Stock”) from the Nasdaq Global Select Market (“Nasdaq”) and deregister the Common Stock from Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Set forth below is a summary of material facts surrounding the Company’s withdrawal notice as required by Rule 12d2-2(c)(2)(iii) under the Exchange Act and Nasdaq Listing Rule 5840(j)(1)(iii).

The Company’s board of directors made the decision to delist and deregister following careful consideration of the Company’s current situation, including filing of the Company’s chapter 11 cases. In addition, the board of directors determined that it is in the Company’s best interest to withdraw the listing and registration to reduce the Company’s costs of compliance with the rules of the SEC and Nasdaq. The Company has notified Nasdaq of its intent to voluntarily delist its Common Stock, and will file a notice on Form 25 relating to such delisting with the SEC on or about March 20, 2023. The Company has not arranged for listing or registration of its Common Stock on another national securities exchange. The Common Stock may be eligible to be quoted on the Pink Open Market operated by the OTC Markets Group Inc. if a market maker sponsors the security and complies with Rule 15c2-11 under the Exchange Act, but the Company can provide no assurances that a public market for trading the Common Stock will exist now or in the future.

The Company is committed to working closely with its stakeholders to minimize the impact of the bankruptcy process and to ensure that its creditors are treated fairly. The Company’s previously announced sale of its BrandLoyalty business to Opportunity Partners B.V. remains on track to close by the second quarter of 2023. PJT Partners LP and Alvarez & Marsal Inc. are acting as investment banker and financial advisor, respectively, and Akin Gump Strauss Hauer & Feld LLP and Cassels Brock & Blackwell LLP are acting as legal advisors to the Company and LoyaltyOne.

Caution Regarding Forward-Looking Statements can be found here. 

SOURCE Loyalty Ventures Inc.

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