Aéropostale’s bankruptcy woes aren’t quite over.
The mall-based casualwear retailer on Friday launched an adversary complaint against Hilco Merchant Resources and Gordon Brothers Retail Partners. The two firms are the liquidators that were brought in to sell off certain inventory that was not being purchased by the Authentic Brands Group-led venture that in September bought Aéropostale out of bankruptcy for $243 million.
While the inventory sale began shortly after Authentic agreed to buy and operate at least 200 Aéropostale stores, along with its web site and international licensing business, Aéropostale claims the liquidators are “wrongfully withholding” a $1.4 million deposit from the bankruptcy estate.
The payment was made in July 2016 to Hong Kong-based Star Fancy Holdings Ltd. for $5.3 million worth of “certain goods.” Although Aéropostale’s asset sale was approved only a month after the payment was made and the goods were later delivered, the company argued such vendor deposits “were expressly excluded from the sale.”
“Under the terms of the purchase agreement and agency agreement… the agent, upon delivery of goods subject to a vendor deposit paid by the debtors, is required to reimburse the debtors for the full amount of the vendor deposit,” Aéropostale said in its complaint.
The company went on to claim that it has been demanding repayment of the deposit since October but Hilco and Gordon Brothers have “refused” under the direction of the holding company that was formed when Aéropostale’s main assets were sold, Aero Opco.
Aéropostale’s estate is also seeking damages equal to the amount of the deposit for the alleged breach of the agency agreement with Hilco and Gordon Brothers, breach of the September purchase agreement and a declaration that the deposit at issue belongs to the bankruptcy estate.
A representative of Hilco and Gordon Brothers could not be reached immediately for comment.
Aéropostale filed for bankruptcy protection in early May 2016, citing difficulties with private equity backer Sycamore Capital Partners, which it accused of using a “loan to own” strategy, and a dispute with longtime supplier MFG, sourcing as partly to blame for the move.
Since then, and under the ownership of Authentic Brands, Aéropostale has reopened 500 doors across the U.S.
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