Leslie's, Inc. Files for Chapter 11, Enters Restructuring Support Agreement

What Happened

• Leslie’s, Inc. and ten U.S. subsidiaries filed voluntary Chapter 11 petitions in the U.S. Bankruptcy Court for the Southern District of Texas on September 30, 2026 to implement a pre‑arranged plan of reorganization and entered into a Restructuring Support Agreement (RSA) with holders of its prepetition term loans. The company filed first‑day motions seeking debtor‑in‑possession (DIP) financing and authority to continue ordinary‑course operations, including payroll, taxes, insurance and critical vendors.
• The RSA contemplates a $90.0 million Term Loan DIP Facility and a $225.0 million ABL DIP Facility, a proposed $60.0 million private placement of new common equity, and several conversion/roll options on the Plan Effective Date. The company also announced a strategic plan and closed about 76 underperforming U.S. stores on September 29, 2026.

Key Details

• Petition date: September 30, 2026; Chapter 11 cases jointly administered as In re Leslie’s, Inc., et al.
• Consenting Term Loan Lenders hold ~81.1% of outstanding prepetition term loan principal and signed the RSA.
• Proposed DIP facilities: ABL DIP $225M and Term Loan DIP $90M (expected $45M funded at interim order, remaining $45M at final order); interest rates: ABL SOFR+6.50% and Term Loan SOFR+3.25%; maturities ~6 months from petition date.
• Equity and conversion mechanics in RSA: $60M equity financing (expected to be ~55.8% of New Common Equity), certain DIP amounts to convert to exit debt or New Common Equity (including conversion of remaining Term Loan DIP obligations into ~30% of New Common Equity), and 10% of New Common Equity reserved to prepetition term lenders pro rata; existing common stock will be cancelled on the Plan Effective Date for no consideration.
• Key RSA milestones: interim DIP order within 3 days of petition, file plan & disclosure statement within 20 days, plan confirmation within 100 days, plan effective date within 110 days.
• Nasdaq action: On Sept 25, 2026 Nasdaq notified the company of imminent delisting due to the bid price being under $1.00 for 30 consecutive business days; Nasdaq indicated trading suspension effective Oct 6, 2026 unless appealed by Oct 2, 2026. The company does not intend to appeal and expects trading may move to an OTC market.
• Operational action: On Sept 29, 2026 Leslie’s closed ~76 U.S. stores identified as under- or non-performing and expects to vacate them within about two weeks; the company cannot currently estimate related impairment, inventory write-offs or exit costs.

Why It Matters

• For equity investors: The filing and RSA make clear the company expects to cancel existing shares on the Plan Effective Date and issue new equity under the restructuring. The filing warns holders that existing common stock may be cancelled and that shareholders could incur a significant loss.
• For bond/loan investors and creditors: The RSA and DIP financings outline a path for creditors to participate in new debt and equity. Proposed conversion and backstop arrangements materially affect how prepetition lenders and backstop parties will be repaid or reorganized.
• For traders and liquidity: Nasdaq has indicated likely suspension/delisting; the stock may move to OTC trading with uncertain liquidity and pricing. The company cautions trading during Chapter 11 will be highly speculative and may not reflect any recovery.
• For operations: The DIP facilities and first‑day motions are intended to keep stores and supply chains operating during the Chapter 11 cases, but store closures and possible impairments may affect near‑term cash flow and results.

(Prepared from Leslie’s, Inc. Form 8‑K filed Sept 30, 2026.)