As distressed companies seek to strengthen their capital structures without the stigma of chapter 11, Weil has developed a groundbreaking method for companies to restructure debt that avoids equity cancellation, delisting and the need to address the entire capital structure. Instead, this new approach surgically addresses only the part of the capital structure that needs attention to give companies more runway to turn their businesses around.

Weil’s new “Stapled Exchange” was developed through the Firm’s work for Fossil Group, a U.S. retailer with brands including Fossil, Skagen, Relic and Zodiac and licensed names like Armani Exchange, Diesel, Michael Kors, Tory Burch, and Kate Spade. Fossil faced a debt issue: unsecured “baby bonds” held in $25 increments in approximately 1,500 separate accounts.

Doing an out-of-court exchange with that many small holders would have been almost impossible, and chapter 11 was too harsh a remedy since the company was already in an operational turnaround that was gaining traction.

Weil designed Stapled Exchange as a way to target Fossil’s debt by taking its restructuring to the U.K., combining an exchange offer with a backstop U.K. Restructuring Plan to address maturities and bind holdouts. If enough holders exchanged, court proceedings were avoided; if not, the U.K. plan proceeded. The approach mirrors stapling a prepackaged chapter 11 filing to a U.S. exchange offer, but here tied to a U.K. plan.

This is the first time a U.S. public company has gone outside the U.S. to conduct a restructuring of U.S.-governed debt and Fossil is the first publicly listed U.S. company to adopt the Stapled Exchange. Similar transactions have occurred in Europe before, where companies changed their “center of main interest” to England, or another jurisdiction to access that regime.

On November 10, 2025, the High Court of Justice of England and Wales approved Fossil’s plan in the United Kingdom. Shortly thereafter, on November 12, the Bankruptcy Court for the Southern District of Texas entered an order recognizing and giving effect to the U.K. plan under chapter 15 of the bankruptcy code, enabling enforcement of the U.K. plan in the United States. The U.K. permits third-party releases, and chapter 15 recognition makes them enforceable in the U.S. (despite recent U.S. rulings in the chapter 11 context).

Stapled Exchange has cross-border applicability around the world. Companies could also elect to staple a U.K. Scheme of Arrangement to an exchange offer (a “Stapled Scheme Exchange” or “SSE”). While Singapore seeks to attract more restructuring work, England remains preferred for consistency and case law. Under the “law of Gibbs,” English courts control contracts governed by English law. Stapled Exchange and SSE also appeal to Latin American and Asian companies with New York law bonds and family ownership, since they preserve equity while fixing debt.

The Weil team advising Fossil is led by Restructuring Department Co-Chair Sunny Singh and partner Gary Holtzer and includes Restructuring associates Phil DiDonato, Alexandra Langmo, Joe Sullivan and Immanuel Vorbach (Not Yet Admitted in New York); Capital Markets partners Frank Adams and Corey Chivers and associates Michael Cremers, Emma McBride, Andrene Loiten and Evan Caltavuturo; Co-Head of Weil’s Governance, Securities & Reporting Group Lyuba Goltser and partner Adé Heyliger; Banking & Finance partner Vynessa Nemunaitis and associate Emma Xing (Not Yet Admitted in New York); U.K. Restructuring partners Andrew Wilkinson and Gemma Sage, counsel Kirsten Erichsen and associates Kyle McLachlan and Rupert Balfe (Not Yet Admitted in U.K.); U.K. Litigation partner Jamie Maples, counsel Frankie Cowl and Rosalind Meehan and associates Craig Watson, Rhys Williams and Dhru Vyas (Not Yet Admitted in the U.K.); U.K. Tax counsel Stuart Pibworth and associate Anna Ritchie; and Tax partners Stuart Goldring and Graham Magill and counsel Adam Sternberg.