Lawyers from Dehehantong assisted clients in investing in the bankruptcy reorganization project of La Chapelle

Dehehantong has been entrusted by investors to provide legal advisory services for clients' participation in the La Chapelle bankruptcy reorganization investment project. This project was completed by a team composed of Lawyer Qiu Wenyu, a member of the National Management Committee of Dehehantong and the leader of the Enterprise Relief and Restructuring Business Center of Dehehantong, and Lawyer Yang Yiqin, a partner of the Shanghai office of Dehehantong.

Founded in 1998, La Chapelle is a youthful memory for many people born in the 1980s and 1990s. At its peak, it owned more than 20 brands such as La Chapelle, Puella and Candie's, and was once called "the Chinese version of Zara" by consumers. The company was listed on the Hong Kong Stock Exchange in 2014 and on the A-share market in 2017. It was once the first clothing enterprise in China to be listed on both the A-share and H-share markets. Later, it encountered problems such as a decline in revenue and losses in performance. Eventually, due to insolvency, it was filed for bankruptcy liquidation in 2021.

On July 24, 2024, an investor consortium composed of Hangzhou Guangsui Jintou Holding Co., Ltd. and Shanghai Orient Securities Innovation Investment Co., Ltd. signed a "Reorganization Investment Agreement" with La Chapelle and its bankruptcy administrator. The investors will subscribe for 1,584,455,037 yuan worth of newly issued domestic shares of La Chapelle at a price of 220 million yuan. Accounting for approximately 65% of La Chapelle's total share capital. The announcement shows that the draft of the reorganization plan was approved by the employee creditor group, the tax creditor group and the general creditor group on April 3, 2025, and by the investor group on April 30, 2025. Dehehantong was entrusted by the investor, Shanghai Orient Securities Innovation Investment Co., LTD., to provide the client with full-process legal services.

In view of the fact that the investor's share subscription will trigger the mandatory offer obligation under the Company Takeovers, Mergers and Share Repurchase Code of Hong Kong, Baker McKenzie assisted Guangsui Financial Holdings in obtaining the liquidation exemption granted by the Securities and Futures Commission of Hong Kong. By introducing co-investors, La Chapelle will be able to obtain approximately 220 million yuan in debt repayment funds and 199 million yuan in liquidity support, and its debt pressure will be alleviated through debt-to-equity swaps. This measure initiated the enterprise's regeneration mechanism, alleviated the company's debt burden of billions, and provided financial guarantees for the resumption of normal operations. The reorganization of La Chapelle is a microcosm of the traditional clothing industry's pursuit of survival amid the changing times. Its significance lies in providing a possible transformation path for the industry through debt resolution, business transformation and brand renewal.

Dehehantong, through professional legal services, assists clients in investing in the bankruptcy reorganization project of La Chapelle, gathering the professional collaboration and wisdom of multiple parties, and deepening professional accumulation and industry experience in practice. The field of bankruptcy reorganization is highly specialized and complex. The project achievements have been trusted by the clients and supported by the industry. In the future, Dehehantong will continue to focus on the professional field of enterprise relief and restructuring, adhering to the philosophy of "diligence, craftsmanship, and excellence", constantly improving service quality, providing clients with more efficient, high-quality, and diverse legal services, and contributing more to the high-quality development of the legal service industry.