Dane en France. Photo: Timo

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In the last few hours Quiksilver has issued a press release announcing it has filed for Chapter 11 bankruptcy in the US.

The brand had already lost 79% of its market value this year, share prices having fallen to 46 cents, and following reports of the bankruptcy plan this figure dropped 78% to 10 cents in late trading Tuesday. The company's operations outside the US, which it maintains are in good health, or at least not yet in urgent need of medical attention, are not part of the bankruptcy filing.

Chapter 11 is a chapter of the United States Bankruptcy Code that permits the reorganisation of a business, in other words the intention is to rise once again out of the lone and level sands with the help of someone else's money. Oaktree Capital Management will be providing the company with the $175m (£113.73m) needed in order to restructure "and fund its ongoing operations in the US and abroad", the end goal being, in the words of CEO Pierre Agnes, "to re-establish Quiksilver as the leader in the action sports industry". The deal is still subject to court approval.

Below is the beginning of the Quiksilver press release, which can be read in full here.

Quiksilver, Inc. today announced that it commenced voluntary proceedings for relief under chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court") for its U.S. subsidiaries. The chapter 11 filing, which is supported by 73% of the Company’s senior most class of debt, will facilitate Quiksilver’s financial and operational restructuring, which is designed to restore the Company to long-term financial health.

The Company’s European and Asia-Pacific businesses and operations remain strong and are not part of this filing. Additionally, holders of the Company’s Eurobonds sufficient to waive any technical default arising from the filling have agreed to allow the Company to reorganize its U.S. operations in chapter 11.

Following the filing, Quiksilver will continue to operate in the ordinary course of business as a “debtor-in-possession" under the jurisdiction of the Bankruptcy Court. Contemporaneously with the filing, the Company has requested that the Bankruptcy Court approve $175 million in new debtor-in-possession financing ("DIP") with affiliates of Oaktree Capital Management, L.P.(“Oaktree") and Bank of America, N.A. The Company anticipates that such financing, in conjunction with other existing sources of liquidity, will be more than sufficient to fund its ongoing operations in the U.S. and abroad. The Company also requested various forms of “first day" relief from the Bankruptcy Court to ease the U.S. subsidiaries’ transition into chapter 11 and protect its stakeholders and customers.

The Plan Sponsor Agreement (“PSA") with Oaktree provides a comprehensive blueprint for the Company’s emergence from chapter 11 as a going concern pursuant to a plan of reorganization, under which Oaktree has agreed to provide all necessary funding for the chapter 11 process and will convert its substantial debt holdings into a majority of the stock in the reorganized Company on exit. The PSA contains certain conditions, including confirmation of a plan of reorganization by the Bankruptcy Court.

Oaktree is a leader among global investment managers specializing in alternative investments, with over $100 billion in assets under management. The firm, which emphasizes a value-oriented and risk controlled approach to investments, has a proven track record of success assisting companies through the restructuring process and in the action sports industry.