A federal bankruptcy court judge in Newark on Thursday approved the sale of urbanwear retailer Against All Odds USA Inc. to New Deal LLC.
The purchase price for the bankrupt retailer couldn’t be immediately determined. Against All Odds filed for Chapter 11 bankruptcy court protection in January.
According to court papers, the sale will provide unsecured creditors with an estimated 14 percent return, compared with the “estimated minus 0.7 percent to [positive] 3.4 percent they would have gotten through a liquidation.”
Court papers filed by the unsecured-creditors’ committee noted the “success of this case is even more poignant in the current climate, due to the ‘perfect storm’ created by the global financial crisis, the lack of credit, the reduction in consumer spending, the collapse of the residential real estate market, a deteriorating commercial real estate market and the adverse impact on retailers caused by certain [amendments]” to the federal bankruptcy code in 2005.
The Moonachie, N.J.-based firm had sales of $15.5 million in 2000, grew to a $78.7 million chain in 2005 and ended 2007 with sales of $121.1 million, according to court papers. Net income fell in 2007, and the retailer sustained a loss in 2008. At the time of the filing, the chain operated 64 units in eight eastern and two western states.
Against All Odds was founded in 1995 by Kenny Khym.
In its petition, the retailer listed Wicked Fashions Inc. of Fort Lee, N.J., as its top unsecured creditor, owed $3.9 million. Wicked, the manufacturer of Southpole, a hip-hop line, was founded and is headed by chief executive officer David Khym, Kenny’s brother.
At the time of its bankruptcy filing, Against All Odds listed The CIT Group/Commercial Services Inc. as the second largest unsecured credit with claims of $2.1 million.