Byline: Dianne M. Pogoda, with contributions from Jeff Siegel

NEW YORK — Beau-David Inc., a women’s apparel house that manufactures under the Expo and Beau-David labels, has filed a Chapter 11 petition here.
Beau-David attributed the filing to a sales decline and a dispute with one of its four principals.
The company, at 1400 Broadway, is hopeful that it can reach a deal to sell the company before being forced to liquidate, according to bankruptcy court papers.
In a separate suit filed in the Supreme Court of the State of New York last year, Beau-David charged Sammy Liu, the partner with which it has the dispute, with diverting money from the company. Walfredo Tang, an employee of the company, and Yin Ling Leung Liu, Sammy Liu’s wife, are also named as defendants in the suit.
The action seeks “to recover more than $15 million, representing corporate monies and business opportunities converted by defendant Sammy Liu over the course of at least the last five years,” according to court papers.
Sammy Liu, who left the company in April 1994, was in charge of the company’s production and contracting arrangements. The complaint alleges that he arranged for multiple checks to be drawn on invoices for contracting work, and some of those funds were diverted to Liu.
The suit also accuses Liu of negotiating labor prices that were fraudulently inflated and says the contractors used were companies in which Liu and/or his wife had an interest, or firms in which they asked for an interest in order to get work from Expo.
The suit was initially filed last May.
Donald Relkin, attorney for Liu, said, “Their charges are completely false. It is a device to avoid paying Sammy Liu $800,000, which was his investment in the company. It’s a scheme to defraud him of his investment.”
As a result of the Chapter 11 filing, the entire proceeding is now tied up in bankruptcy court.
Relkin said Liu has filed an arbitration proceeding against Beau-David, and if Liu is unable to collect his funds, further action might be taken.
The apparel manufacturer said in court papers it expects to reach an agreement with its pre-petition factor, BNY Commercial Corp., that will allow it to continue to operate for another month and make its January shipments.
However, Beau Baker, principal and chairman of Beau-David, said he anticipates being able to continue in business beyond the end of the month.
Beau-David had a volume in 1994 of about $24 million, according to Baker.
At the time of the Chapter 11 filing, Beau-David had assets of $2.3 million, including $1.8 million in inventory. Liabilities totaled $2.9 million, almost $1.6 million of that secured debt.
The top unsecured creditors are: Mann Industries, Richmond, Va., owed $191,059; Helmsley Spear Inc., $184,489; JB Martin, Leesville, S.C., $114,552; Gilby Trimming Co., $110,858, and Deluxe Velvet Co., $90,161.