True Religion - Skatoff Declaration - 10.2.2020 (EXECUTED)

UNITED STATES BANKRUPTCY COURT DISTRICT OF DELAWARE

_______________________________________________ ) In re: ) Chapter 11 ) TRUE RELIGION APPAREL INC., et al., ) Case No. 20-10941 (CSS) ) Debtors.1 ) (Jointly Administered) ) )

DECLARATION OF DAVID SKATOFF

I, David Skatoff, hereby declare under penalty of perjury, pursuant to section 1746 of title

28 of the United States Code, as follows:

1. I am a Partner at Ducera Partners LLC (“Ducera”), which maintains its headquarters

at 11 Times Square, 36th Floor, New York, New York, 10036. Ducera has been retained by

counsel to Farmstead Capital Management LLC (“Farmstead”) to assist with certain matters in

connection with the Debtors’ Second Amended Joint Chapter 11 Plan of Reorganization of True

Religion Apparel, Inc. and its Affiliated Debtors [Dkrt. No. 423] (the “Plan”), including to serve

as an expert witness to address the valuation of the Debtors and their assets at the upcoming hearing

to confirm the Plan.

2. I am over the age of 18 and am duly authorized to submit this declaration (this

“Declaration”) in lieu of direct examination. I reserve the right to amend this declaration as

necessary.

3. The statements in this Declaration are, except where specifically noted, based on

my personal knowledge or opinion, discussions with Farmstead, information that is publicly

1 The Debtors and the last four digits of their respective taxpayer identification numbers are: TRLG Intermediate Holdings, LLC (3150); True Religion Apparel, Inc. (2633); Guru Denim LLC (1785); True Religion Sales, LLC (3441); and TRLGGC Services, LLC (8453). The Debtors’ headquarters is located at 1888 Rosecrans Avenue, Manhattan Beach, CA 90266.

Case 20-10941-CSS Doc 577 Filed 10/02/20 of 14

available, or information that I have received from the Debtors (including discussions with their

management) or Ducera’s employees working directly with me or under my supervision or

direction. If called upon to testify, I would testify to the facts set forth herein.

4. This declaration summarizes the analysis set forth in the valuation report attached

hereto as Exhibit A (the “Valuation Report”). I understand that other professionals, retained by

the Debtors (supporting confirmation of the Plan) and by parties opposing confirmation, have

submitted valuation reports in connection with confirmation of the Plan. Prior to submitting the

Valuation Report, neither I nor any personnel at Ducera reviewed any of those reports or discussed

their contents with anyone.

Background and Qualifications

5. Ducera is an independent investment banking firm that provides strategic advisory

and M&A services as well as capital markets knowledge, financing skills, and restructuring

capabilities that are employed in large-scale corporate restructuring transactions. Ducera’s

professionals have extensive experience providing investment banking services to financially

distressed companies and to creditors, equity holders, and other constituencies in reorganization

proceedings and complex financial restructurings, both in-court and out-of-court. Since its

inception in 2015, Ducera has provided restructuring services in numerous large, complex chapter

11 cases. In addition to out-of-court restructuring and sale assignments, Ducera has served as an

investment banker to debtors, creditor groups, and asset purchasers in a number of bankruptcy

matters.2

2 For instance, Ducera is providing or has provided financial advisory services in connection with the following matters: In re Imerys Talc America, Inc., Case No. 19-10289 (Bankr. D. Del.); In re Paniolo Cable Company, LLC, Case No. 18-01319 (Bankr. D. Haw.); In re Specialty Retail Shops Holding Corp., Case No. 19-80064 (Bankr. D. Neb.); In re Sungevity, Case No. 17-10561 (Bankr. D. Del.); In re Toys “R” Us, Inc., Case No. 17-034665 (Bankr E.D. Va.); In re Panda Temple Power, LLC, Case No. 17-10839 (Bankr. D. Del.); In re Dacco Transmission Parts (NY), Inc., Case No. 16-13245 (Bankr. S.D.N.Y.); In re Hercules Offshore, Inc., Case No. 16-11385 (Bankr. D. Del.); In re Illinois Power Generating Co., Case No. 16-36326 (Bankr. S.D. Tex.); In re Paragon Offshore PLC,


6. Prior to working at Ducera, I was the Managing Partner at Skatoff & Company.

Previously, I worked at Eton Park, was a founding partner of R6 Capital Management, and was an

officer at Greenhill and Houlihan Lokey. In those roles, I focused on financial restructuring

advisory, liability management, distressed M&A, and restructuring and rescue financings. I hold

an MBA from the Wharton School at the University of Pennsylvania and a Bachelor of Science

degree in Commerce from the McIntire School at the University of Virginia.

7. I have over 25 years of investment banking and capital structure advisory

experience assisting companies on a wide range of strategic matters. I have advised companies,

creditors, shareholders, and other stakeholders regarding restructurings and recapitalizations,

chapter 11 reorganizations, and mergers and acquisitions. While at Ducera and at prior firms, I

have advised significant stakeholders in chapter 11 cases, including most recently Centric Brands

Inc., Nine West Holdings, Inc., and American Apparel.

8. I have testified at trial, deposition, or by proffer in the Chapter 11 proceedings of

Adelphia, the foreign bankruptcy proceedings of Crystallex, and the Chapter 11 proceedings of

RBX Corp. As a result of my experience and training, I am familiar with the standard

methodologies and analyses necessary to determine a company’s enterprise value.

Summary of Analysis and Conclusions

9. At the request of Farmstead’s counsel, Ducera was asked to perform a valuation

analysis of the estimated enterprise value of the Debtors on a going concern basis as of the Plan’s

proposed effective date. I understand that this analysis is being used for purposes related to

confirmation of the Plan.

Case No. 16-10386 (Bankr. D. Del.); and In re Remington Outdoor Company, Inc., Case No. 20-81688-CRJ11 (Bankr. N.D. Ala.).


10. The preparation of a valuation analysis is a complex analytical process involving

subjective determinations about which methodologies of financial analysis are most appropriate

and relevant and the application of those methodologies to particular facts and circumstances in a

manner that is not readily susceptible to summary description.

11. In performing our analysis, Ducera relied on various sources of information. Those

include historical and projected operating and financial information provided directly by the

Debtors and their advisors, publicly available information (including news releases, regulatory

filings and SEC filings) for relevant companies within the retail industry, and third-party reports

and analyses related to the retail industry overall.

12. In preparing its valuation analysis, Ducera utilized a variety of generally recognized

valuation methodologies, including (a) a comparable public companies analysis, (b) a selected

transactions analysis and (c) two discounted cash flow analyses.

13. After performing four different valuation analyses, Ducera ultimately concluded

that the Debtors would have, as of the effective date of the Plan, an enterprise value between $50

and $85 million.

Publicly Traded Companies Approach

14. A publicly traded companies approach (or comparable public companies analysis)

(“Publicly Traded Companies Approach”) involves selecting and analyzing publicly traded


companies similar to the subject company, determining the valuation multiples for such companies

and then applying those multiples to the subject company. This approach requires that adjustments

be made to account for similarities and differences between the subject company and the publicly

traded companies.

15. Under the Publicly Traded Companies Approach, Ducera first determined both

larger-cap and smaller-cap companies most comparable to the Debtors. For larger-cap companies,

Ducera selected American Eagle Outfitters, Inc., Urban Outfitters, Boot Barn Holdings, Inc.,

Land’s End, Inc., The Buckle, Inc., The Children’s Place, Inc., Zumiez, Inc., and Abercrombie &

Fitch Co. For smaller-cap companies, Ducera selected J. Jill, Inc., Chico’s FAS, Inc., Citi Trends,

Tilly’s, Inc., and Cato Corporation. These companies were chosen because, like True Religion,

they generally sell apparel and related products. We looked at both large- and small-cap companies

in order to consider the implications of a company’s size on valuation multiples.

16. Ducera then developed a range of indicative enterprise value to revenue and

indicative enterprise value to EBITDA multiples that could be applied to the Debtors’ revenue and

EBITDA, respectively, based on the comparable public companies’ revenue, projected revenue,

EBITDAs, and projected EBITDAs.


17. Ducera selected a range of valuation multiples for the Debtors based on the

valuation multiples of the comparable public companies and the application of considered

judgment as to how the market would value the Debtors based on their similar or varying

characteristics versus the comparable public companies. Risk-based adjustments in multiple

selection are frequently warranted when actual results or forward-looking projections for the

Debtors have a different risk profile when compared to the actual results or forward-looking

projections for the comparable public companies for the same period. In addition, forward-looking

multiples may only be appropriately utilized to the extent there are available consensus analyst

estimates for the comparable public companies for the same period of time.

18. In determining revenue and EBITDA enterprise valuation multiples for the

Debtors, Ducera weighed several considerations, including, but not limited to, (i) the magnitude

of the Debtors’ significant revenue underperformance versus the comparable public companies

over the latest 12-month period, (ii) the Debtors’ demonstrated history of failing to achieve their

forecasts, and (iii) the Debtors’ management’s forward-looking EBITDA projections assume a

dramatic improvement in profitability vis-à-vis their latest reported financial statements.

19. While the Debtors’ LTM Adjusted EBITDA is negative $18 million (which

precludes use of an LTM EBITDA for calculating enterprise value), the Debtors project that their

12-month EBITDA will swing to a positive $17 million and positive $36 million by September 30,

2021 and September 30, 2022, respectively.


20. Ducera also took into account several other considerations in its analysis including:

• The Debtors are smaller in scale than most publicly traded companies;

• While the Debtors are planning to emerge from their second Chapter 11 case in the past three years, none of the comparable public companies have filed for Chapter 11 during this period. Many retailers that have filed Chapter 11 have demonstrated a proclivity to subsequently file a second Chapter 11 case, reflecting a heightened risk for the Debtors;

• The Debtors have replaced the substantial majority of their executive leadership team (including the CEO and CFO), while the leadership of the comparable public companies is more stable;

• The Debtors have recently made changes to their supply chain operations, materials utilized, and partners in the Far East, with a changeover of ~60% of the vendor base;

• The Debtors also have a high product concentration in jeans versus more diversified product offerings by the comparable public companies;

• The Debtors have reduced their Selling, General & Administrative expenses (“SG&A”) in calendar year 2020, but it is unclear whether the Debtors will be able to successfully operate and grow sales with a reduced SG&A structure;

• The Debtors have made modifications to lease agreements to provide higher retail downside protection versus the comparable public companies for the near-term period; and

• The Debtors’ continuing evolution of brand identity and market strategy over the past few years poses another area of significant uncertainty.

21. Taking all of those factors into consideration and exercising our considered

judgment, we calculated an indicative enterprise value for the Debtors based on the Publicly

Traded Companies Approach of between $52 million and $85 million.


Selected Transactions Analysis

22. Ducera also performed a selected (or precedent) transactions analysis (“Selected

Transactions Analysis”). Selected Transaction Analysis involves analyzing precedent transactions

involving publicly traded companies that are comparable to the subject company in order to

determine valuation multiples implied by the transaction that can then be applied to the subject

company.

23. Ducera selected nine recent M&A transactions involving acquisitions of bankrupt

retailers in the last six years. Ducera utilized publicly available information to calculate an LTM

revenue multiple for each of the transactions. In particular, the transactions selected were (a) the

September 2020 purchase of JCPenney’s retail and operating assets by Brookfield and Simon

Property Group, (b) the August 2020 purchase of Brooks Brothers by SPARC Group, (c) the

November 2019 purchase of Barneys New York by Authentic Brands Group, (d) the October 2019

purchase of certain assets of Destination Maternity by Marquee Brands, (e) the June 2017 purchase

of Eastern Outfitters by Sports Direct International, (f) the November 2016 purchase of certain

assets of American Apparel by Gildan Activewear, (g) the September 2016 purchase of

Aeropostale’s operating assets by Authentic Brands Group, (h) the March 2015 purchase of Wet

Seal by Versa Capital Management, and (i) the May 2014 purchase of Coldwater Creek by Gordon

Brothers, Hilco, and Sycamore Partners.


24. Ducera calculated the Enterprise Value / Revenue multiples using both the Debtors’

LTM revenue and 2021 revenue.

25. Ducera weighed the same considerations as in the Publicly Traded Companies

Approach, while also recognizing that the selected transactions, unlike the comparable public

companies, were all made in the context of a Chapter 11 bankruptcy of the target, among other

considerations.


26. EBITDA and forward-looking information for the target companies was generally

not available. We were also mindful of the fact that acquirers tend to base their views of valuation

on actual financial performance and ascribe significantly less weight to projected and unproven

financial results.

27. Taking all of those factors into consideration and exercising our considered

judgment, Ducera estimates an indicative enterprise value for the Debtors based on the selected

transactions analysis of between $52 million and $73 million.

Discounted Cash Flow Analyses

28. Ducera also prepared two discounted cash flow analyses. Discounted cash flow

analysis involves discounting the expected future cash flows of the business to the present, using

an appropriate weighted-average cost of capital, and assuming a sale of the business or terminal

valuation at the end of the projection period. The future expected cash flows of the business should

reflect a balanced view of how the Debtors expect to perform in the future given both key upside

opportunities and downside risks inherent in the business.

29. Here, we used two separate sets of financial projections to perform two different

discounted cash flow analyses.

30. In the “Management Case,” the Debtors are projecting a dramatic increase in

EBITDA for the 12-month period ending September 30, 2021 versus the LTM period ending July

31, 2020. Ducera understands the Debtors believe the Management Case is achievable provided

that (i) store-level year-over-year revenue growth recovers to more stable levels, including during


the critical 2020 holiday season, (ii) there is not another wave of COVID-related demand

suppression, whether driven by regulatory actions or customer response to a resurgence in new

case counts, and (iii) demand remains unaffected by (a) any continuing lack of further fiscal

stimulus from the United States and/or relevant state governments and (b) the associated economic

impact on the Debtors’ customers. As a result of these risk factors, Ducera views the Management

Case for the 12-month period ending September 30, 2021 as more of an upside case than an

expected case.

31. Given that the Management Case represents in our view an upside scenario, Ducera

has utilized an adjusted set of financial projections that it believes reflects an alternative plausible

outcome to the Debtors’ financial projections. We refer to this as the “Sensitivity Case.” In the


Sensitivity Case, which Ducera has generally discussed with the Debtors’ management, estimated

2021 revenue is calculated as 80% of the Debtors’ LTM revenue (as of July 31, 2020), which is

designed to account for potential revenue declines attributable to COVID-related performance.

Ducera also estimated 2021 EBITDA at $5 million compared to $17 million in the Management

Case. Estimated 2022 EBITDA reflects a one-year delay from the Management Case EBITDA

(i.e., the estimated 2021 EBITDA from the Management Case is the estimated 2022 EBITDA in

the Sensitivity Case). Subsequent to 2022, Ducera then grows estimated EBITDA by 5.0%

through estimated 2025. Ducera has also held EBITDA margins for estimated 2022-2025 constant

at the Management Case estimated 2021 EBITDA margin of 9.8%.


32. In both the Management Case and the Sensitivity Case, Ducera used a terminal

mid-point EBITDA multiple of 4.25x to determine the terminal value and a 23% mid-point

discount rate. A traditional calculation of the weighted average cost of capital was not possible

given a lack of publicly traded companies in an analogous situation with the Debtors. Ducera

arrived at a mid-point EBITDA multiple of 4.25x based on our selected EBITDA multiple range

of 3.5x to 5.0x in the Publicly Traded Companies Approach. Ducera arrived at a mid-point

discount rate of 23% based on (i) our judgment and experience concerning the levels of return that

an equity investor would require in order to invest equity capital in a retail business that has been

through two Chapter 11 cases in the recent past and in the context of other issues discussed above,

(ii) an assumed cost of debt in the range of the Debtors’ pro forma cost of debt, and (iii) an assumed

debt to total capitalization ratio that is reasonable based on our experience.

33. Under the Management Case, Ducera estimates indicative enterprise value to be

between $80 million to $106 million. Under the Sensitivity Case, Ducera estimates indicative

enterprise value to be between $46 million to $63 million.

Conclusion

34. After taking into consideration the reliability of each of these valuation analyses in

the context of the Debtors’ emergence from Chapter 11, Ducera weighed the four analyses

accordingly and concluded an enterprise value on the low end of $50 million and an enterprise

value of $85 million on the high end.


Pursuant to 28 U.S.C. § 1746, I declare under penalty of perjury that the foregoing is true

and correct to the best of my knowledge, information, and belief.

Dated: October 2, 2020 New York, New York

Respectfully submitted,

/s/ David Skatoff David Skatoff


Exhibit A

Case 20-10941-CSS Doc 577-1 Filed 10/02/20 Page 1 of 26

1

Privileged and ConfidentialAttorney Work ProductFor Discussion Purposes OnlyNot for Distribution or Reproduction Absent Written Consent

October 2020

True Religion Apparel, Inc.

Discussion Materials (Contains Non-Public Information)


2


Indicative Enterprise Value

Low High

Publicly Traded Companies Approach $52 $85

Selected Transactions Approach 52 73

Discounted Cash Flow Approach - Management Case 80 106

Discounted Cash Flow Approach - Sensitivity Case 46 63

Indicative Enterprise Valuation Level $50 $85

Summary of Indicative Enterprise Value

Summary of Indicative Enterprise Value

($ in millions)


3


Publicly Traded Companies Approach The Publicly Traded Companies Approach involves:

– Selection and analysis of comparable Publicly Traded Companies to the subject company

– Selection of a range of valuation multiples for the subject company based on the valuation multiples of the Publicly Traded Companies and the application of considered judgment as to how the market would value the subject company based on its similar or varying characteristics vs. the Publicly Traded Companies

Risk-based adjustments in multiple selection are frequently warranted when actual results or forward-looking projections for the subject company have a different risk profile as compared to the actual results or forward-looking projections for the publicly traded companies for the same period

Forward-looking multiples may only be appropriately utilized to the extent there are available consensus analyst estimates for the publicly traded companies, for the same period of time

In selecting a range of applicable revenue and EBITDA enterprise valuation multiples for True Religion Apparel, Inc. (“True Religion” or the “Company”), Ducera Partners LLC (“Ducera”) weighed the following considerations, among other factors:

– The magnitude of True Religion’s significant revenue underperformance vs. comparable Publicly Traded Companies over the latest 12-month period (see page 18)

– True Religion’s demonstrated history of failing to achieve its forecasts (see page 19)

– True Religion’s forward-looking EBITDA projections assume a dramatic improvement in profitability vis-à-vis the Company’s latest reported financial statements

Notes:(1) LTM EBITDA is calculated based on latest Company-reported adjusted EBITDA ending 07/31/20

EBITDA % Growth

LTM Adjusted EBITDA(1) ($18) n/a

12-month EBITDA ending 9/30/21 17 n/a

12-month EBITDA ending 9/30/22 36 110%

($ in millions)

True Religion EBITDA Projections


4


Publicly Traded Companies Approach (Continued)

– In comparison with the publicly traded companies, True Religion is significantly smaller in scale

– True Religion is planning to emerge from its second Chapter 11 in the past three years, while the publicly traded companies have not filed for Chapter 11 during this period; many retailers that have filed Chapter 11 have demonstrated a proclivity to subsequently file Chapter 11 again (see page 20) reflecting a heightened risk for True Religion

– True Religion has recently replaced the substantial majority of the Company’s executive leadership team (including the CEO and CFO) vs. more stable teams at the Publicly Traded Companies

– True Religion has recently made significant changes to its supply chain operations, materials utilized, and partners in the Far East, with a changeover of ~60% of the vendor base

– True Religion has a high product concentration in jeans vs. more diversified product offerings of the Publicly Traded Companies

– True Religion has seen significant reductions to SG&A in calendar year 2020; open question of True Religion’s ability to drive its business with a reduced SG&A structure

– True Religion has made modifications to lease agreements to provide higher retail downside protection vs. the Publicly Traded Companies for the near-term period

– True Religion’s continuing evolution of brand identity and market strategy over the past few years poses another area of significant uncertainty


5



Sources: FactSet – Pricing as of 09/29/2020Notes:(1) LTM Revenue is calculated based on latest company-reported revenue ending 07/31/20(2) LTM EBITDA is calculated based on latest company-reported EBITDA ending 07/31/20

Multiple Range Indicative Enterprise Value

Low High Low High

Revenue - LTM(1) $184 0.3x 0.4x $55 $73

Revenue - 2021 174 0.3x 0.4x 52 69

Adjusted EBITDA - LTM(2) (18) NMF NMF NMF NMF

Adjusted EBITDA - 2021 17 3.5x 5.0x $60 $85


Representative

Amount

Publicly Traded Companies Approach – Summary of Indicative Enterprise Value

($ in millions)


6



($ in millions)

Publicly Traded Companies

Sources: Company filings, FactSet – Pricing as of 09/29/2020Notes:(1) Consensus estimates for the publicly traded companies are for fiscal years ending in January/February

Revenue(1) Revenue YoY Growth EV/Revenue EBITDA(1) EV/EBITDA EBITDA Margin

Company

Current

EV FY19 A FY20 E FY21 E 18-19 A 19-20 E 21-22E FY19 A FY20 E FY21 E FY19 A FY20 E FY21 E FY19 A FY20 E FY21 E FY19 A FY20 E FY21 E

Larger-Cap CompaniesAmerican Eagle Outfitters, Inc. $2,040 $4,308 $3,744 $4,323 6.8% (13.1%) 15.4% 0.5x 0.5x 0.5x $495 $115 $436 4.1x 17.7x 4.7x 11.5% 3.1% 10.1%Urban Outfitters 1,500 3,984 3,466 4,016 0.8% (13.0%) 15.9% 0.4x 0.4x 0.4x 374 118 355 4.0x 12.8x 4.2x 9.4% 3.4% 8.8%Boot Barn Holdings, Inc. 932 846 815 917 8.8% (3.6%) 12.5% 1.1x 1.1x 1.0x 96 79 103 9.7x 11.8x 9.0x 11.3% 9.7% 11.3%Lands' End, Inc. 753 1,450 1,391 1,464 (0.1%) (4.1%) 5.3% 0.5x 0.5x 0.5x 78 67 75 9.7x 11.2x 10.0x 5.4% 4.8% 5.1%The Buckle, Inc. 736 900 821 907 1.7% (8.8%) 10.5% 0.8x 0.9x 0.8x 155 139 151 4.7x 5.3x 4.9x 17.2% 17.0% 16.7%The Children's Place, Inc. 614 1,871 1,435 1,579 (3.5%) (23.3%) 10.0% 0.3x 0.4x 0.4x 177 12 113 3.5x 51.3x 5.4x 9.5% 0.8% 7.1%Zumiez, Inc. 570 1,034 975 1,064 5.7% (5.7%) 9.1% 0.6x 0.6x 0.5x 111 104 113 5.1x 5.5x 5.0x 10.8% 10.6% 10.6%Abercrombie & Fitch Co. 462 3,623 2,996 3,411 0.9% (17.3%) 13.9% 0.1x 0.2x 0.1x 256 142 262 1.8x 3.3x 1.8x 7.1% 4.7% 7.7%

Peer Average $951 2.6% (11.1%) 11.6% 0.5x 0.6x 0.5x 5.3x 14.9x 5.6x 10.3% 6.8% 9.7%Peer Median $745 1.3% (10.9%) 11.5% 0.5x 0.5x 0.5x 4.4x 11.5x 5.0x 10.1% 4.8% 9.5%

Smaller-Cap CompaniesJ. Jill, Inc. $261 $691 $459 $556 (2.1%) (33.6%) 21.1% 0.4x 0.6x 0.5x $62 ($66) $22 4.2x n/m 12.0x 8.9% (14.3%) 3.9%Chico's FAS, Inc. 163 2,038 1,450 1,733 (4.4%) (28.9%) 19.5% 0.1x 0.1x 0.1x 79 (217) 63 2.1x n/m 2.6x 3.9% (15.0%) 3.6%Citi Trends 158 782 n/a n/a 1.6% n/a n/a 0.2x n/a n/a 38 n/a n/a 4.2x n/a n/a 4.8% n/a n/aTilly's, Inc. 72 619 522 612 3.5% (15.7%) 17.1% 0.1x 0.1x 0.1x 51 (2) 41 1.4x n/m 1.8x 8.2% (0.3%) 6.7%Cato Corporation 50 825 n/a n/a (0.5%) n/a n/a 0.1x n/a n/a 54 n/a n/a 0.9x n/a n/a 6.5% n/a n/a

Peer Average $141 (0.4%) NMF NMF 0.2x NMF NMF 2.6x NMF NMF 6.5% NMF NMFPeer Median $158 (0.5%) NMF NMF 0.1x NMF NMF 2.1x NMF NMF 6.5% NMF NMF


7


Selected Transactions Approach

The Selected Transactions Approach involves:

– Selection and analysis of precedent transactions of publicly traded companies comparable to the subject company

– Selecting a range of valuation multiples for the subject company based on the implied valuation multiples of the Selected Transactions and the application of considered judgment as to how the market would value the subject company based on its similar or varying characteristics vs. the companies that were acquired in the Selected Transactions

In selecting a range of applicable revenue enterprise valuation multiples for True Religion, Ducera weighed the same considerations as the Publicly Traded Companies Approach, while also recognizing that the Selected Transactions, unlike the Publicly Traded Companies, were all made in the context of Chapter 11 bankruptcy of the target, among other considerations

EBITDA and forward-looking information for the acquired companies was generally not available

Buyers of companies tend to frame their views of valuation based on actual financial performance and ascribe significantly less weight to projected and unproven financial results

Ducera selected nine comparable M&A transactions involving acquisitions of retail companies that have filed for bankruptcy to guide valuation multiples


8


Selected Transactions Approach (Continued)

Multiple Range Indicative Enterprise Value

Low High Low High

Revenue - LTM(1) $184 0.3x 0.4x $55 $73

Revenue - 2021 174 0.3x 0.4x 52 69


Representative

Amount

Selected Transactions Approach – Summary of Indicative Enterprise Value

($ in millions)

Notes:(1) LTM revenue is calculated based on latest company-reported revenue ending 07/31/20


9


Acquirer / Target Date EV Revenue EV/Revenue EV/EBITDA Description

September 2020 $1,750(1) $10,716(1) 0.2x 3.0x

August 2020 $325(2) $991(2) 0.3x n/a

November 2019 $271(3) $800(3) 0.3x n/a

October 2019 $50(4) $406(4) 0.1x 3.9x

June 2017 $101(5) $400(5) 0.3x n/m

November 2016 $88(6) $663(6) 0.1x n/a


Notes:(1) Per FactSet, JC Penney SEC filings (2019 10-K), and Reorg Research report dated 09/09/2020(2) Per Reorg Research case summary dated 07/08/2020(3) Per Barneys First Day Declaration, Reorg Research, and DIP Financing Motion dated 08/06/2020(4) Per Destination Maternity 10-K, First Day Declaration, and press release dated 12/12/2019(5) Per SEC filings and Sports Direct press release dated 04/21/2017(6) Per American Apparel First Day Declaration and Debtwire report dated 01/10/2017

In August 2020, SPARC Group acquired Brooks Brothers for $325 million

Brooks Brothers had $991 million in revenue in FY 2019

In August 2020, J.C. Penney announced that it would pursue a credit bid transaction with its lenders as it completes Chapter 11 reorganization (filed May 15, 2020)

On September 9, it agreed to sell retail and operating assets to Brookfield and Simon Property Group for $1.75 billion

($ in millions)

In November 2019, Barneys was acquired by Authentic Brands for $271 million

Barneys filed for Chapter 11 on 8/6/2019

In October 2019, Destination Maternity’s e-commerce business and IP assets were acquired by Marquee Brands

Destination Maternity filed for Chapter 11 on 10/21/2019

In April 2017, Sports Direct International acquired Eastern Outfitters LLC for $101 million in a 363 asset sale

Eastern Outfitters had ~$400 million in revenue in FY 2016

In November 2016, Gildan Activewear acquired American Apparel’s IP assets for $88 million

American Apparel filed for Chapter 22 on 11/14/2016


10


September 2016 $243(7) $1,507(7) 0.2x n/m

March 2015 $28(8) $450(8) 0.1x n/a

May 2014 $161(9) $742(9) 0.2x n/m

Average 0.2x

Median 0.2x


Notes:(7) Per Aeropostale 10-K, First Day Declaration, and press release dated 09/15/2016(8) Per Wet Seal Disclosure Statement dated 02/11/2015 and Debtwire report dated 04/01/2015(9) Per Coldwater Creek 10-K and Debtwire report dated 05/06/2014

($ in millions)

In September 2016, a consortium of buyers acquired Aeropostale’soperating assets for $243 million

Aeropostale filed for Chapter 11 on 5/4/2016

In March 2015, Versa Capital Management acquired Wet Seal for $28 million

Wet Seal filed for Chapter 11 on 1/15/2015

In May 2014, Gordon Brothers, Hilco, and Sycamore Partners acquired Coldwater Creek for $161 million

Coldwater Creek filed for Chapter 11 on 4/11/2014

Acquirer / Target Date EV Revenue EV/Revenue EV/EBITDA DescriptionAcquirer / Target Date EV Revenue EV/Revenue EV/EBITDA Description


11


Discounted Cash Flow Approach

The Discounted Cash Flow Approach involves:

– Discounting the expected future cash flows of the business to the present, using an appropriate weighted-average cost of capital, and assuming a sale of the business or terminal valuation at the end of the projection period

– The future expected cash flows of the business should reflect a balanced view of how the Company can “expect” to perform in the future given the key upside opportunities and downside risks inherent in the business

Observations regarding True Religion’s financial projections (the “Management Case”):

– The Company is projecting a dramatic increase in EBITDA for the 12-month period ending 9/30/21 vs. the LTM period ending 7/31/20

We understand the Company believes these results are achievable so long as:

Store-level year-over-year revenue growth recovers to more stable levels, including the critical 2020 holiday season

There is not another wave of COVID-related demand suppression, whether driven by regulatory actions or customer response to a resurgence in new case counts

Demand remains unaffected by any continuing lack of fiscal stimulus from the U.S. and/or relevant state governments and the associated economic impact on the Company’s customers

In light of these qualifications, Ducera views the Company’s Management Case for the 12-month period ending 9/30/21 as more of an “upside” case than an “expected” case

While the company has not produced a downside case projection for the 12-month period ending 9/30/21, we understand from discussions with management that they believe they can manage the business to at least cash-flow breakeven in the downside case


12


Discounted Cash Flow Approach (Continued)

– The Company is projecting another dramatic increase in EBITDA for the 12-month period ending 9/30/22 vs. the 12-month period ending 9/30/21

We understand the Company believes these results are achievable so long as:

Store level year-over-year revenue growth recovers to more stable levels across this 24-month projection period

There is not another wave of COVID-related demand suppression, whether driven by regulatory actions or customer response to a resurgence in new case counts across this 24-month projection period

Demand remains unaffected by any continuing lack of fiscal stimulus from the U.S. and/or relevant state governments and the associated economic impact on the Company’s customers

The Company is successful in growing retail and winning significant additional market share through each of its e-commerce and wholesale channels

– We understand these risk factors are the principal driver to the difference in the Company’s EBITDA projection for the 12-month period ending 9/30/22 vs. 9/30/21

In light of these qualifications, Ducera views the Company’s Management Case for the 12-month period ending 9/30/22 as more of an “upside” case than an “expected” case

While the company has not produced a downside case projection for the 12-month period ending 9/30/22, we understand from discussions with management that they believe they can manage the business to at least cash-flow breakeven in the downside case


13



Remediating Adjustments and Observations:

– As explained in the foregoing, Ducera views the Company’s Management Case as reflecting more of an “upside” view than an “expected” view

– At the same time, as mentioned in the foregoing, the Discounted Cash Flow Approach requires a discounting of “expected” future cash flows

– To address this potential inconsistency, Ducera has utilized an adjusted set of financial projections (the “Sensitivity Case”), which we believe reflects an alternative plausible outcome to the Company’s financial projections

2021E revenue is calculated as 80% of True Religion’s LTM revenue (as of 7/31/2020), which reflects the potential revenue declines attributable to COVID-related performance

2021E EBITDA is reduced to $5 million from $17 million in the Management Case

2022E EBITDA reflects a one-year delay from the Management Case EBITDA (i.e. the 2021E EBITDA from the Management Case is the 2022E EBITDA in the Sensitivity Case)

Subsequent to 2022E, EBITDA is then grown by 5.0% through 2025E

EBITDA margins for 2022E-2025E are held constant at the Management Case 2021E EBITDA margin (9.8%)

– Ducera has not evaluated whether the Sensitivity Case might lead to lender covenant issues and/or a liquidity shortfall based on the Company’s pro forma financing arrangements

– Ducera notes that a version of this approach was recently utilized in the Ascena Retail Group, Inc. Chapter 11 filing, where Ascena’s investment banker was provided with two cases of financial projections by Ascena management, which the investment bank then used to underpin its discounted cash flow analysis


14


Exit Value Multiple Range Indicative Enterprise Value

Low High Low High

Management Case Scenario 3.5x 5.0x $80 $106

Sensitivity Case Scenario 3.5x 5.0x 46 63



Discounted Cash Flow Approach Summary

($ in millions)


15


Discounted Cash Flow Approach (Management Case)($ in millions)

Illustrative True Religion DCF

Assumptions

Revenue Growth Rate 16.6% 2.1% 0.1% 0.7%EBITDA Margin 9.8% 17.6% 16.2% 14.0% 13.5%Tax Rate 26.0% 26.0% 26.0% 26.0% 26.0%

Discounted Cash Flow Analysis 2021E 2022E 2023E 2024E 2025E

Revenue $174 $202 $207 $207 $208Cost of Revenue (76) (81) (82) (83) (85)Gross Profit $97 $122 $124 $124 $123

Gross Margin 56.0% 60.2% 60.2% 59.7% 59.3%

EBITDA $17 $36 $33 $29 $28( - ) Depreciation & Amortization (4) (5) (5) (6) (6) EBIT $13 $31 $28 $23 $22( - ) Taxes (3) (8) (7) (6) (6) NOPAT $9 $23 $21 $17 $16(+) Depreciation & Amortization 4 5 5 6 6( - ) Capex (0) (3) (6) (6) (6)( + / - ) Change in NWC 5 (5) (1) (1) (1) Unlevered Free Cash Flow $18 $19 $19 $16 $16

Discount Rate 23.0% 23.0% 23.0% 23.0% 23.0%Discount Factor 0.81 0.66 0.54 0.44 0.36PV of Free Cash Flow $14 $13 $10 $7 $6

Terminal EBITDA Multiple 4.25x Illustrative Value Sensitivity( x ) Terminal EBITDA $28 Terminal EBITDA Multiple

Terminal Value (Undiscounted) $119 3.5x 4.0x 4.5x 5.0x( x ) Discount Factor 0.36 21.0% $90 $95 $101 $106Terminal Value (Discounted) $42 Discount 22.0% 87 93 98 103

% of TEV 45.8% Rate 23.0% 85 90 95 10024.0% 83 87 92 97

Total Enterprise Value $92 25.0% 80 85 89 94


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Discounted Cash Flow Approach (Sensitivity Case)

Notes:(1) For 2023E-2025E (years three through five), EBITDA is grown at 5% from 2022E EBITDA of $17 million, and EBITDA margin is kept constant at 9.8%(2) Working capital, D&A, and capital expenditures are calculated using % of revenue and % of COGS assumptions from the Management Case

($ in millions)Illustrative True Religion DCF

Assumptions

Revenue Growth Rate 18.2% 5.0% 5.0% 5.0%EBITDA Margin 3.4% 9.8% 9.8% 9.8% 9.8%Tax Rate 26.0% 26.0% 26.0% 26.0% 26.0%

Discounted Cash Flow Analysis 2021E 2022E 2023E 2024E 2025E

Revenue $147 $174 $182 $191 $201Cost of Revenue (65) (76) (73) (77) (82)Gross Profit $82 $97 $110 $114 $119

Gross Margin 56.0% 56.0% 60.2% 59.7% 59.3%

EBITDA $5 $17 $18 $19 $20( - ) Depreciation & Amortization (4) (4) (5) (5) (6) EBIT $1 $13 $13 $13 $14( - ) Taxes (0) (3) (3) (3) (4) NOPAT $1 $9 $10 $10 $10(+) Depreciation & Amortization 4 4 5 5 6( - ) Capex (0) (3) (5) (6) (6)( + / - ) Change in NWC 8 (6) 0 (2) (2) Unlevered Free Cash Flow $12 $5 $9 $8 $8

Discount Rate 23.0% 23.0% 23.0% 23.0% 23.0%Discount Factor 0.81 0.66 0.54 0.44 0.36PV of Free Cash Flow $10 $3 $5 $3 $3

Terminal EBITDA Multiple 4.25x Illustrative Value Sensitivity( x ) Terminal EBITDA $20 Terminal EBITDA Multiple

Terminal Value (Undiscounted) $84 3.5x 4.0x 4.5x 5.0x( x ) Discount Factor 0.36 21.0% $52 $56 $60 $63Terminal Value (Discounted) $30 Discount 22.0% 50 54 58 61

% of TEV 54.9% Rate 23.0% 49 52 56 5924.0% 47 51 54 58

Total Enterprise Value $54 25.0% 46 49 53 56

(1) (1)(1)

(2)

(2)

(2)


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Appendix


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Comparison of Publicly Traded Companies Quarterly Revenue Performance

($ in millions) 1Q19 2Q19 3Q19 4Q19 FY19 1Q20 2Q20 YTD 2020 LTM

True Religion $62 $68 $57 $72 $259 $24 $31 $55 $184QoQ / YoY Growth (2.4%) 10.0% (16.6%) (27.2%) (11.5%) (61.0%) (55.1%)

American Eagle Outfitters, Inc. $886 $1,041 $1,066 $1,315 $4,308 $552 $884 $1,435 $3,816QoQ / YoY Growth 7.7% 7.9% 6.2% 5.7% 6.8% (37.8%) (15.1%)

Urban Outfitters 864 962 987 1,170 3,984 588 803 1,392 3,549QoQ / YoY Growth 1.0% (3.0%) 1.4% 3.6% 0.8% (31.9%) (16.5%)

Abercrombie & Fitch Co. 734 841 863 1,185 3,623 485 698 1,184 3,232QoQ / YoY Growth 0.4% (0.2%) 0.2% 2.6% 0.9% (33.9%) (17.0%)

The Buckle, Inc. 201 204 224 271 900 115 216 331 827QoQ / YoY Growth (1.7%) 1.4% 4.2% 2.5% 1.7% (42.7%) 6.0%

Zumiez, Inc. 213 228 264 329 1,034 138 250 388 981QoQ / YoY Growth 3.2% 4.3% 6.1% 7.9% 5.7% (35.3%) 9.6%

Chico's FAS, Inc. 518 508 485 527 2,038 280 306 586 1,598QoQ / YoY Growth (7.8%) (6.7%) (3.0%) 0.4% (4.4%) (45.9%) (39.8%)

The Children's Place, Inc. 412 420 525 513 1,871 255 369 624 1,662QoQ / YoY Growth (5.5%) (6.3%) 0.4% (3.3%) (3.5%) (38.1%) (12.3%)

Lands' End, Inc. 262 298 340 549 1,450 217 312 529 1,419QoQ / YoY Growth (12.5%) (3.1%) (0.5%) 9.4% (0.1%) (17.3%) 4.6%

Boot Barn Holdings, Inc. 186 187 284 189 846 148 - 148 808QoQ / YoY Growth 14.7% 11.3% 11.8% (2.1%) 8.8% (20.5%) na

J.C. Penney Company, Inc. 2,439 2,509 2,384 3,384 10,716 1,082 1,390 2,472 8,240QoQ / YoY Growth (5.6%) (9.2%) (10.1%) (7.7%) (8.1%) (55.6%) (44.6%)

Cato Corporation 230 213 192 191 825 101 168 269 651QoQ / YoY Growth (3.3%) 1.8% 0.8% (0.8%) (0.5%) (56.3%) (20.9%)

Citi Trends 205 183 183 211 782 116 216 332 726QoQ / YoY Growth (2.8%) 0.5% 4.4% 4.9% 1.6% (43.4%) 18.2%

J. Jill, Inc. 176 181 166 168 691 91 93 184 518QoQ / YoY Growth (2.8%) 0.6% (4.6%) (1.7%) (2.1%) (48.4%) (48.7%)

Tilly's, Inc. 130 162 155 172 619 77 136 213 540QoQ / YoY Growth 5.4% 2.8% 5.4% 1.1% 3.5% (40.7%) (16.0%)

Peer Average (0.7%) 0.1% 1.6% 1.6% 0.8% (39.1%) (14.8%)Peer Median (2.3%) 0.5% 1.1% 1.8% 0.9% (39.4%) (16.0%)

Quarterly Revenue of Publicly Traded Companies

Sources: FactSet, Company filings


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Analysis of True Religion Projections Track Record True Religion has historically experienced challenges with regard to forecasting, as shown by the variance between its predicted

and actual financial performance in 2018 and 2019

2017 Disclosure Statement Projections v. Actual Performance

Sources: Company filings, Company reports

($ in millions) 2017 DS Projections Actuals VarianceFY 2018 FY 2019 FY 2018 FY 2019 FY 2018 FY 2019

Total Net Sales $336.3 $342.9 $292.8 $259.2 ($43.5) ($83.7)

Gross Profit $193.0 $197.1 $152.4 $114.1 ($40.6) ($83.0)% of Sales 57.4% 57.5% 52.1% 44.0% (5.3%) (13.5%)

Adj. EBITDA $36.6 $39.0 $5.8 ($17.5) ($30.8) ($56.5)% of Sales 10.9% 11.4% 2.0% na (8.9%) na

Operating Profit $25.0 $28.1 ($20.2) ($36.2) ($45.2) ($64.3)% of Sales 7.4% 8.2% na na na na

Pre-Tax Income $13.6 $16.6 ($42.3) ($50.5) ($55.9) ($67.1)% of Sales 4.0% 4.8% na na na na

Net Income $8.2 $10.0 ($34.1) ($50.5) ($42.3) ($60.5)% of Sales 2.4% 2.9% na na na na


20


Representative Retail Companies with Multiple Chapter 11 Filings

Sources: Company filings, CNBC

Representative Retail Companies with Multiple Chapter 11 Filings

Company First Filing Second Filing Current Status

Eastern Outfitters LLC Feb-17 Feb-20 Acquired, liquidated

Barneys New York, Inc. Jun-05 Aug-19 Acquired, liquidated

Charming Charlie Dec-17 Jul-19 Liquidated

Gymboree Group, Inc. Jun-17 Feb-19 Liquidated, going-concern

Payless, Inc. Apr-17 Feb-19 Liquidated

RadioShack Mar-15 Mar-17 Liquidated, going-concern

Wet Seal Jan-15 Feb-17 Acquired, liquidated

American Apparel, Inc. Oct-15 Nov-16 Acquired, liquidated

The Great Atlantic & Pacific Tea Company ("A&P") Dec-10 Jul-15 Liquidated


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COVID-19 Forecasting Outlook

“The Company cannot foresee whether the outbreak of COVID-19 will be effectively contained, nor can it predict the severity and duration of its impact. As such, impacts of COVID-19 on the Company are highly uncertain, and the Company will continue to assess the financial impacts. The significant disruption to the global economy and to the Company's business may lead to additional triggering events that may indicate that the carrying value of certain assets, including inventories, long-lived assets, and intangibles may not be recoverable. The situation is changing rapidly and future material impacts may materialize that are not yet known.”

10-Q September 3, 2020p.37

“The COVID-19 global pandemic could continue to have a material impact on our business, including our results of operations, financial condition and liquidity. …The extent of the impact of the COVID-19 global pandemic on our business is highly uncertain and difficult to predict, given the innumerable unknowns regarding the duration and severity of the pandemic.”

10-QSeptember 10, 2020p.24

American Eagle Outfitters, Inc.

“We are unable to accurately predict the impact that COVID-19 will have on our operations going forward due to uncertainties that will be dictated by the length of time that such disruptions continue, which will, in turn, depend on the currently unknowable duration of the COVID-19 pandemic and the impact of governmental regulations that might be imposed in response to the pandemic, which could, among other things, require that we close our distribution and fulfillment centers or otherwise make it difficult or impossible to operate our e-commerce business. …While it is premature to accurately predict the ultimate impact of these developments, we expect our results for the remainder of the COVID-19 pandemic to be adversely impacted in a significant manner.”


“There is significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the U.S. economy and consumer confidence. These and other effects make it more challenging for us to estimate the future performance of our business, particularly over the near-to-medium term.”

10-QAugust 5, 2020p.7

Boot Barn Holdings, Inc.

The Children’s Place, Inc. Zumiez, Inc.


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COVID-19 Forecasting Outlook (Continued)

“Due to the inherent uncertainty involved with estimates, actual results may differ. The extent to which the current outbreak of coronavirus disease (“COVID-19”) impacts the Company’s business and financial results will depend on numerous evolving factors...The Company’s assessment of these, as well as other factors, could impact management's estimates and result in material impacts to the Company’s consolidated financial statements in future reporting periods.”

10-Q September 8, 2020p.9-10

“The impact of the COVID-19 pandemic and measures to prevent its spread are affecting our business in a number of ways. We continue to believe that we will emerge from these events well positioned for long-term growth, though we cannot reasonably estimate the duration and severity of this global pandemic or its ultimate impact on the global economy and our business and results.”


“The extent of the impact of the coronavirus pandemic on our business, consolidated results of operations, consolidated financial position and consolidated cash flows…all of which are highly uncertain and cannot be predicted. Additionally, we may need to cease or significantly limit our operations again if subsequent outbreaks occur, either more broadly or within our stores. Nevertheless, the coronavirus pandemic presents significant uncertainty and risk with respect to our business, financial performance and condition, operating results, liquidity and cash flows.”


Urban Outfitters, Inc.

Abercrombie & Fitch, Co. Lands’ End, Inc.

The Buckle, Inc.

“The company cannot reasonably estimate the length or severity of the pandemic's impact. Also, although the Company had reopened 397 of its 444 stores as of June 5, 2020, it is difficult to estimate the continuing impact of COVID-19 on the Company's consolidated financial position, consolidated results of operations, and consolidated cash flows for the remainder of fiscal 2020.”

10-Q June 11, 2020p.17


23



“The extent to which COVID-19 will impact our business operations, consolidated financial results and liquidity will depend on future developments which are highly uncertain and cannot be predicted. …As a result of the current level of uncertainty over the economic and operational impacts stemming from the COVID-19 pandemic, the impact on our business cannot be reasonably estimated at this time.”


“While we anticipate that the foregoing impacts are temporary, we cannot predict the specific duration for which we may be impacted, and we may experience additional or further impacts from the COVID-19 pandemic, and/or elect or need to take additional measures as the information available to us continues to develop, including with respect to our employees, inventory receipts, store leases, and relationships with our third-party vendors. …The extent to which the COVID-19 pandemic and our response thereto may impact our business, financial condition, and results of operations will depend on future developments, which are highly uncertain and cannot be predicted at this time.”


J. Jill, Inc.

“The degree to which the COVID-19 pandemic impacts our results will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, the duration and spread of the outbreak, its severity, the possibility of a “second wave” of COVID-19, the actions to contain the virus or treat its impact, other actions taken by governments, businesses, and individuals in response to the virus and resulting economic disruption, and how quickly and to what extent normal economic and operating conditions can resume. We are similarly unable to predict the degree to which the pandemic will impact our customers, suppliers and other partners, and their financial conditions, but a material effect on these parties could also adversely affect us.”


Citi Trends, Inc. Tilly’s, Inc.

Chico’s FAS

“The COVID-19 pandemic (the "pandemic") has created and may continue to create significant uncertainty in macroeconomic conditions, which may cause further business disruptions and adversely impact our results of operations. As a result, many of our estimates and assumptions required increased judgment and carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, our actual results could materially differ from those estimates in future periods.”

10-Q August 27, 2020p.9


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“While the Company currently anticipates that our results for the remainder of fiscal 2020 will be adversely impacted, the extent to which COVID-19 impacts the Company’s results will depend on future developments, which are highly uncertain, including possible new information and understanding about the severity of COVID-19, related potential economic impacts to customers and suppliers, and the effect of actions taken to contain it or mitigate its impact.”

10-QAugust 27, 2020p.26

The CATO Corporation


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DisclaimerThe information herein has been prepared exclusively for Proskauer Rose LLP (“Proskauer”), counsel to Farmstead Capital Management, LLC (the “Client”) by Ducera Partners LLC (“Ducera”). The information contained herein is based on information provided by True Religion Apparel, Inc. (“True Religion”) or otherwise publicly available sources.

For the avoidance of doubt, Ducera has not assumed any responsibility for independently verifying the information contained herein. These materials have been prepared exclusively for the benefit and internal use of Proskauer to assist Proskauer (and its Client) with evaluating, on a preliminary basis, the valuation of True Religion and does not carry any right of publication or disclosure, in whole or in part, to any other party. These materials are for illustrative purposes only and no representation or warranty, express or implied, is or will be made, and no responsibility or liability is or will be accepted, by Ducera or by any of its officers, directors, agents, or affiliates as to, or in relation to, the accuracy or completeness of any information contained herein. In furnishing this information, Ducera undertakes no obligation to provide Proskauer (or its Client) with access to additional information, to update any information contained herein, or to correct any inaccuracies herein. These materials and the information contained herein are confidential and may not be disclosed publicly or made available to any third party without the prior written consent of Ducera.

These materials are for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by Ducera. To the fullest extent permitted by applicable laws and rules, the work performed by Ducera, including, without limitation, any communications with Proskauer (or its Client), and any advice, analysis or reports Ducera may prepare, shall be covered by attorney work-product doctrine, the attorney-client privilege, and all other applicable privileges. Any reports or analyses generated by Ducera are not the property of Proskauer (or its Client), and such reports or analyses are property of Ducera.

Ducera does not provide legal, accounting, regulatory or tax advice. Accordingly, any statements contained herein as to tax matters were neither written nor intended by Ducera to be used and cannot be used by any taxpayer for the purpose of avoiding tax penalties that may be imposed on such taxpayer. Each person should seek legal, accounting and tax advice based on his or her particular circumstances from independent advisors regarding the impact of the transactions or matters described herein.


True Religion - Skatoff Declaration - 10.2.2020 (EXECUTED)

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