COURT UPHOLDS REXNORD CLAIM AGAINST MAURICE BIDERMANN
Byline: Katherine Weisman, with contributions from Rich Wilner, New York
PARIS — The Court of Appeals here Thursday upheld a $13 million judgment against Maurice Bidermann, clearing the way for the judgment holder, Rexnord Holdings Inc., to take ownership of roughly 16.5 percent of Bidermann SA.
The court, acting on a case initially filed by Maurice Bidermann while he was in Chapter 11, also threw out the executive’s request to delay action on the $13 million claim for up to two years.
Rexnord’s judgment stems from a 1990 investment Rexnord made in the takeover of Cluett, Peabody & Co. by Bidermann Industries USA (BIUSA). Maurice Bidermann, who controls BIUSA, promised to buy back the investment shares from Rexnord but reneged on that promise, forcing Rexnord to seek — and eventually win — the $13 million judgment.
Rexnord’s nearly four-year chase after the $13 million owed by Maurice Bidermann has been complicated in recent months by the financial woes of Bidermann SA, the Maurice Bidermann-controlled holding company that owns 97.4 percent of Bidermann International, a Paris-based men’s apparel manufacturing conglomerate, and a controlling interest in BIUSA.
Maurice Bidermann has been attempting to sell an equity stake in his holding company as a means of injecting much needed capital into the operation. Rexnord has blocked at least two restructuring deals because each would dilute the worth of Maurice Bidermann’s shares. Maurice Bidermann has maintained that the holding company might be forced into bankruptcy if the restructuring was not done.
BIUSA, Bidermann’s U.S. arm that makes the licensed Ralph Lauren Womenswear and Yves St. Laurent men’s wear lines and Arrow shirts and Gold Toe socks, is not affected by the proposed restructuring.
A source close to Bidermann said that Bidermann could possibly appeal.
Steven Blauner, of Milbank, Tweed, Hadley & McCloy, counsel to Rexnord, said Rexnord now has an executable judgment and could now move in Paris to take ownership of 99,511 shares in the French holding company.
Rexnord had used its U.S. Federal Court judgment to attach those shares, which represent about 16.5 percent of the total shares outstanding in the holding company.