Sidley successfully obtained confirmation of Conn’s, Inc.’s and its Debtor affiliates (the Debtors or Conn’s) Chapter 11 plan from the U.S. Bankruptcy Court for the Southern District of Texas (the Court). The Effective Date of Conn’s Chapter 11 plan occurred on July 31, 2025.
Conn’s was an iconic American furniture and appliance retailer based in The Woodlands, Texas. The company began operations over a century ago, most recently operating across 16 states with over 550 retail locations. The Debtors filed for Chapter 11 bankruptcy protection on July 23, 2024, and listed over US$1.1 billion of total funded recourse debt, trade debt, and non-recourse securitized obligations.
The Sidley team achieved a series of wins during the Chapter 11 process, including getting all 16 first day motions granted by the Court and securing the approval of a US$25 million new-money debtor-in-possession financing package to help Conn’s fund its Chapter 11 cases. After a hearing on September 4, 2024, all motions and the full financing package were approved by the Court on a final basis. At a hearing on November 6, 2024, the Court approved a US$352.9 million sale of a substantial portion of Conn’s assets to stalking horse Jefferson Capital Systems, including Conn’s loan servicing operations as a going concern and monetizing the Conn’s owned portfolio of consumer finance receivables. The Jefferson Capital sale closed on December 3, 2024. On March 31, 2025, the Court approved a settlement with the dealers operating under the company’s Badcock brand and the Debtors’ secured lenders. On June 11, 2025, the Court granted conditional approval of the disclosure statement. The Court granted final approval of the disclosure statement and confirmed the plan on July 21, 2025.
Confirmation and consummation of the plan came at the culmination of an orderly and efficient Chapter 11 process that saw disparate creditors compromise with the company to effectuate a value-maximizing plan that was supported by all of the company’s major constituents. The plan resolves what would have been costly and value-destructive litigation between and among the parties, maximizes value for the estates and for all stakeholders, and positions the wind-down company to obtain a maximum return from the residual assets and receivables on behalf of creditors. The Court also approved the release opt-out for third party releases over an objection from the United States Trustee.
Articles discussing the case have been published by media outlets such as The Wall Street Journal, CNN, Fox Business, The Financial Times, USA Today, The Texas Lawbook, Law360, Furniture Today, and MarketScreener. Turnarounds & Workouts listed Conn’s restructuring among the top 10 “Largest Chapter 11 Bankruptcy Cases of 2024.”
The Sidley team representing Conn’s was led by Duston McFaul, Jackson Garvey, Jeri Leigh Miller, Maegan Quejada, Parker Embry, Chelsea McManus, Nicholas Forger, and Ishani Patel (Restructuring), and included Alison Boren, Adam Nelson, T.J. Gordon, and Joel E. Haas (Global Finance); William Howell and J.D. Swancoat (M&A); Kevin P. Lewis (Transportation); Zackary Pullin and Khoa Nguyen (Tax); Jim Ducayet (Securities and Shareholder Litigation); and David Silva, Andrew F. Rodheim, and Chetan Reddy (Commercial Litigation and Disputes).
