The London Fog Group on Monday filed a voluntary Chapter 11 bankruptcy court petition, seeking to restructure its businesses. The company received a $40 million debtor-in-possession financing facility from Wachovia Bank.
The financing is subject to court approval. The filing was in a Reno bankruptcy court. The company said the filing was necessary because it was unable to secure sufficient financing for day-to-day operations. This is the second bankruptcy filing for the 84-year-old company.
The rainwear and outerwear manufacturer filed a voluntary petition for Chapter 11 bankruptcy court protection on Sept. 27, 1999, in Delaware. In April of 2001, the company emerged from bankruptcy.
T.K. Flatley, managing director of investment banking firm Avalon Group, said London Fog will keep its London Fog and Homestead textiles businesses, which it will restructure through the bankruptcy process.
Flatley said, “We were hired well before the bankruptcy to sell Pacific Trails, and sold it to Perry Ellis International when we found out London Fog needed to go through the bankruptcy process.”
The companies have an agreement in which Perry Ellis will become the “stalking horse” in a bankruptcy court auction to buy Pacific Trails for $14.5 million. The deal is subject to better offers.
For complete coverage, see tomorrow’s WWD.