Jane & Company, a value-oriented cosmetics brand with annual revenues of about $25 million, filed for reorganization Monday under Chapter 11 of the U.S. Bankruptcy Code.
Baltimore-based Jane, which is sold by mass merchants and drugstores, said the filing in Wilmington, Del., was “due to significant cash liquidity issues faced by Jane arising from the economic crisis that affected retail customers nationwide.”
Court documents detailed assets of between zero and $50,000, and liabilities of between $1 million and $10 million. Listed among the top 30 unsecured creditors were: Topline Products Co. Inc., Wayne, N.J., $1.7 million; Jane Holdings LLC, New York, $947,096; Garrett-Hewitt International (N.Y.) Inc., Wilton, Conn., $474,106; DMI, Wharton, N.J., $381,309, and Unique Display Corp., Freeport, N.Y., $336,017.
Five equity holders with preferred and common stock were named in the bankruptcy petition: Walnut Private Equity Fund, New York, holders of a 30.69 percent stake; Stone Canyon Venture Fund, Los Angeles, 30.66 percent; Lisa Yarnell, Stamford, Conn., 11.38 percent; Hauser Davis Tysoe Rorie I LLC, Cincinnati, 18.51 percent, and Omar Karame, Beverly Hills, Calif., 0.03 percent.
A debtor-in-possession financing commitment has been obtained from Jane’s senior secured lender that will allow it to operate in Chapter 11, the firm said. Derek C. Abbott and Daniel B. Butz of the Wilmington law firm of Morris, Nichols, Arsht & Tunnell, LLP, represent the debtors.
Drew McManigle was named chief restructuring officer several weeks ago and is leading Jane’s reorganization efforts. Yarnell, Jane’s chief executive officer, is serving in an advisory role.
After months of speculation, the filing “really is not a surprise to many people,” McManigle told WWD. “But I do think with the fresh start provision it will give Jane an opportunity to come out on the other side of this process.”
He said the firm’s debtor-in-possession financing commitment will allow the company to run and fill orders and get it into a “business as usual scenario” at least through June.
“We will try to fast-track this; the longer you operate in Chapter 11,” the worse the outcome for the company, McManigle said, alluding to a possible sale of Jane.
On Feb. 28, Jane alerted suppliers in a letter to its “major cash liquidity crisis,” and how it was “unable to meet its current payment obligations.” The problems were attributed to three factors, including a number of discrepancies with a “major mass retailer,” late payments from retailers as well as an aggressive December new product launch.
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