Press Release

SSG Advises Rubie’s Costume Company, Inc. in the Sale of Substantially all Assets


SSG Capital Advisors, LLC (“SSG”) acted as the investment banker to Rubie’s Costume Company, Inc. and its U.S. based subsidiaries and affiliates (collectively “Rubie’s”) in the sale of substantially all of their assets to RUBIES II, LLC. The sale was effectuated through a Chapter 11 Section 363 process in the U.S. Bankruptcy Court for the Eastern District of New York. The transaction closed in October 2020.

Headquartered in Long Island, NY, Rubie’s is a family-owned and operated designer, manufacturer and distributor of costumes and related accessories with a wide-ranging portfolio of licensed products including Marvel, Warner Brothers, Nickelodeon, Disney and Lucasfilm costumes, memorabilia, novelties and toys. As the world’s largest costume provider, the Rubie’s brand has been synonymous with holiday outfits and accessories for nearly 70 years.

Rubie’s endured challenges through 2018 and 2019 primarily due to the continued shift in consumer preferences toward e-commerce. In 2019, Rubie’s implemented comprehensive operational restructuring programs to bring operating expenses in line with revenue expectations in addition to implementing a new go-to-market strategy with an enhanced focus on online retail. While these initiatives resulted in a significant improvement in profitability, the onset of COVID-19 impacted Rubie’s ability to obtain adequate financing to support its seasonal working capital needs.

SSG was initially retained by Rubie’s in April 2020 to refinance its credit facility and secure additional funding for seasonal working capital purposes. In need of immediate funding to begin its 2020 Halloween inventory build, Rubie’s determined that filing for protection under Chapter 11 would provide access to restricted cash on its balance sheet and allow it to secure the funding necessary to continue to operate in the ordinary course. SSG conducted a comprehensive post-petition process to secure DIP financing as a bridge to an exit from bankruptcy. While several parties submitted term sheets, the proposal from JMB Capital Partners Lending, LLC was determined to be the best offer.   The DIP facility was approved after two contested hearings and provided $45 million of post-petition funding, in addition to the cash collateral of the pre-petition bank group loan, which enabled Rubie’s to meet critical manufacturing and shipping deadlines for the 2020 Halloween season.

The DIP order required Rubie’s to complete a transaction that repaid the DIP lender and pre-petition lenders in full by the end of Q3 2020. Once the DIP financing was secured, SSG immediately began the process of soliciting interest from potential strategic and financial partners who could provide the capital and operational expertise needed to complete the turnaround and fund an exit from bankruptcy. Following an expedited marketing process and receipt of multiple letters of intent, RUBIES II, LLC, a newly formed entity led by collectibles industry veteran Joel Weinshanker and a private investment firm, was selected as the Stalking Horse bidder. After SSG’s remarketing process attracted significant interest from several potential competing bidders, the Stalking Horse bid was deemed the highest and best offer for Rubie’s assets and provided the highest likelihood of closing within the aggressive timeline.

SSG’s expertise in conducting both a comprehensive financing and sale process within an expedited timeframe enabled Rubie’s to successfully operate in and exit from bankruptcy. The sale transaction, with a value of approximately $140 million, saved thousands of jobs during a time of unprecedented macroeconomic uncertainty and resulted in the repayment of all pre and post-petition secured obligations, the assumption of all post-petition accounts payable, payment of all administrative and priority claims and a substantial recovery to the unsecured creditors.

Other professionals who worked on the transaction include:

  • Frank A. Oswald, Brian F. Moore, Brian F. Shaughnessy, Patrick Marecki, Eitan Blander, Edward Wu and Katharine E. Scott of Togut, Segal & Segal LLP, counsel to Rubie’s Costume Company, Inc.;
  • Edward J. LoBello, James D. Garbus, Kevin Schlosser, Andrew J. Turro, Howard B. Kleinberg, Steven T. Cheng, Matthew A. Marcucci and Jordan D. Weiss of Meyer, Suozzi, English & Klein, P.C., counsel to Rubie’s Costume Company, Inc.;
  • Baker Smith, David Berliner, James Schwarz, Anthony Del Piano, David Mintz and Jared Schierbaum of BDO Consulting, LLC, financial advisor to Rubie’s Costume Company, Inc.;
  • Burton S. Weston of Garfunkel Wild, P.C., counsel to Rubie’s Costume Company, Inc. shareholders;
  • Robert M. Hirsh and Phillip Khezri of Lowenstein Sandler LLP, counsel to JMB Capital Partners Lending, LLC, DIP lender;
  • Cathy Hershcopf, Ian A. Nussbaum, Lauren A. Reichardt and Savannah Harms of Cooley LLP, counsel to RUBIES II, LLC;
  • Nickolas Karavolas of Phillips Lytle LLP, John Ashmead of Seward & Kissel LLP, Brian I. Swett of McGuireWoods LLP, Andrew M. Kramer of Otterbourg P.C., Rick D. Hyman of Duane Morris LLP, Patrick M. Birney of Robinson & Cole LLP and Michael J. Venditto of Reed Smith LLP, counsel to the pre-petition secured lender group;
  • Joel Getzler, Bert Weil and Mark Samson of Getzler Henrich & Associates LLC, financial advisors to the pre-petition secured lender group;
  • George P. Angelich, Jordana L. Renert, Beth M. Brownstein, Eric Roman, Eric A. Biderman, Cynthia M. Weiss, David Mayo and Laura Dripps of Arent Fox LLP, counsel to the Unsecured Creditors Committee; and
  • Kevin P. Clancy, Cynthia Romano, Vincenzo Toppi, Jon Scherr, Ying Zheng, Sean Duthie and Shivani Dholakia of CohnReznick LLP, financial advisors to the Unsecured Creditors Committee, and Jeff Manning and Iany Ianachkova of CohnReznick Capital Markets Securities LLC.