The chief operating officer of bankrupt Hartmarx Corp. has disputed allegations of irregularities in the transition of the firm to new ownership.
Hartmarx, known as “Oldco” in bankruptcy parlance, is winding down operations following the closing of the sale of its assets to Emerisque Brands and SKNL North America Friday.
Taras Proczko, executive vice president and chief operating officer of Hartmarx, said Wednesday that there were “categorically no irregularities in the company’s cash accounts,” as some sources alleged regarding Oldco’s financial situation in the days leading up to the sale.
Proczko also said the reason Oldco employees were not paid on Friday was because funding wasn’t made in time for payroll. He added that, under the terms of the asset purchase agreement, Newco, or Hartmarx Operating Co. LLC, as the new entity is called, agreed to assume “accrued payrolls including payroll taxes” and certain other obligations.
He said there is a “minimal residual” in terms of assets in Oldco’s estate, but said it was “still too early” to tell what, if any, return there would be to unsecured creditors. With the winding-down process just beginning, Proczko also said he didn’t know how long the process will take before it is completed.
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