Tarrant Apparel Group has settled litigation with the firm with which it coowned the American Rag Cie brand sold at Macy’s.
The apparel firm traded complaints in Los Angeles Superior Court earlier this year with American Rag Cie II and American Rag Cie LLC. The companies initially accused Tarrant of making late royalty payments and attempted to end their licensing agreement. Tarrant filed a cross complaint in February accusing the American Rag companies of breach of contract, involuntary dissolution and breach of fiduciary duties.
The settlement revealed Tuesday extends the licensing agreement between Tarrant subsidiary Private Brands Inc. and American Rag Cie LLC for the American Rag Cie trademark through Sept. 30, 2018, and amends the licensing territory for the brand to the U.S., Canada, Mexico and Bermuda. Private Brands had previously been the exclusive licensee for the trademark in all markets except Japan. Certain categories of American Rag merchandise are sublicensed to Macy’s Merchandising Group.
The agreement also reduces the annual guaranteed minimum royalties as well as revises the royalty rates, according to Tarrant. The earlier and revised amounts weren’t disclosed.
The Los Angeles-based apparel-maker added that, as part of the settlement, it no longer owns an equity interest in American Rag Cie LLC or American Rag Compagnie. Prior to the new arrangement, Tarrant and American Rag Cie II jointly owned the trademark through American Rag Cie LLC.
American Rag Cie LLC did not respond to a request for comment.
Separately, Tarrant said Tuesday that Nasdaq Global Market extended its suspension of the firm’s bid price requirements through April 17. The exchange, Tarrant said, will not take action to delist the company for price deficiency before that date.
In October, Nasdaq notified Tarrant that the firm had failed to comply with its $1 minimum bid price for continued listing. Shares of the company had traded below the exchange’s minimum since February. The suspension had been set to expire on Jan. 16.
After spending most of the day in positive territory, shares of Tarrant closed Tuesday at 42 cents, down 4 cents, or 8.7 percent.
In April, Tarrant co-founders Gerard Guez and Todd Kay proposed acquiring the company’s outstanding publicly held shares in a bid to take the company private. The offer is still pending.
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