Byline: Arthur Friedman and Jeff Siegel
NEW YORK — The Expo and Beau David dress labels have been kept alive, enabling spring merchandise to be shipped to retailers.
Beau David Inc., which made the moderate and better price lines, has received bankruptcy court approval to sell its assets to SBL Designs Inc.
The sale, which includes the rights to all names and trademarks, will allow the lines to continue to be marketed without interruption, said Jay Silverberg, of Silverberg, Stonehill & Goldsmith, counsel to Beau David.
Silverberg estimated the value of the deal at $300,000 to $400,000.
The attorney said Beau David, which was named for two of its partners — Beau Baker and David Mercer — is in the process of liquidating, while it pursues a lawsuit against one of the firm’s former partners.
In addition to buying the company’s names, SBL Designs also purchased all open orders, work-in-process and properties.
He said all employees will keep their jobs and SBL Designs will take over the Beau David showrooms and offices at 1400 Broadway.
“The fact that there will be no change in labels is satisfying, because the line has been very hot lately,” Baker said.
SBL Designs is owned by four primary partners, Silverberg said. They are Baker and Robert Long, who was also a shareholder at Beau David, and Lester Grayson and Steve Grabow, who are also owners of SL Fashions, a 20-year-old dress firm here.
Mercer is not involved in the new company.
SL Fashions, which makes popular-priced dresses under the Sally Lou label, had a volume of about $75 million last year.
Baker said SBL will operate as a separately owned affiliate of SL Fashions, which he said has “tremendous financial strength and great systems.”
In bankruptcy court papers, Beau David said it lost $1 million each of the last two years. Sales had peaked at $50 million in 1990, but fell to just $24 million last year.
As reported, Beau David’s filing blamed former partner Sammy Liu for much of the company’s financial difficulties. Liu, who left the company in April 1994, was in charge of production.
The company has filed suit against Liu seeking $15 million in damages and accusing him of diverting funds intended for payment on contract work and for fraudulently inflating labor prices for work done by contractors in which Liu or his wife, Yin Ling Lung Liu, had an interest.
The company has obtained a temporary restraining order, attaching all of Liu’s real estate holdings pending the outcome of the case.
Donald Relkin, attorney for Liu, denied the charges, characterizing them as “a scheme to defraud [Liu] of his [$800,000] investment.” Liu has filed an arbitration proceeding seeking to collect his funds.