Women’s Apparel Group, best known for its Chadwicks of Boston catalogue operation, was forced into an involuntary bankruptcy by three creditors who said they are owed $52.8 million.
The Chapter 7 filing was in a federal bankruptcy court in Boston on June 29. Court papers were not immediately available. WAG does business as Boston Apparel Group.
The three creditors are NL Ventures VII United, La Vita Inc. and Your Label Inc. NL Ventures of Dallas holds a lease in which the unpaid claim amount is $52.4 million. La Vita and Your Label, both of Montclair, N.J., are owed $15,686 and $360,863, respectively.
According to a filing by Distinctive Apparel Inc., the holder of senior secured claims against the debtor, a scheduled foreclosure sale was halted by the Chapter 7 filing. DAI said it was owed $11.1 million by WAG, which also has two affiliated business units, MetroStyle and Casual Living.
In a related court filing by WAG, the company said it “suffered considerable financial difficulties over the last several years and...sales have significantly declined.” Moreover, in March it hired Financo Securities to find additional funding or a buyer for the business, court papers said.
Steven Lightman, chief executive officer of WAG, said in a statement filed with the court that because neither funding nor a buyer was found, a decision was made to “sell the assets of WAG and wind down its affairs.”
Jeffrey Dubrow, chief financial officer, said in a similar statement on file with the court that the company has had losses in “excess of $26 million.” He also said book value of gross inventory was $17.5 million, and that the Chadwicks customer lists had a value of $1.8 million.
WAG is seeking an expedited hearing on its request to let the foreclosure sale go forward. A hearing is set for July 19.
BAG, based in Taunton, Mass., was formed in 2008 after Monomoy Capital Investors bought the Redcats USA’s Misses division that included Chadwicks and MetroStyle. In 2010, BAG acquired multichannel women’s apparel firm Casual Living USA. Redcats USA, known as a direct marketer of women’s and men’s plus-size apparel that includes women’s brands Woman Within and Roaman’s, is part of Redcats Group, which in turn is owned by PPR.
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