CAROL LITTLE GOES BACK TO COURT

Byline: Kristi Ellis

LOS ANGELES — Chorus Line Corp. and California Fashion Industries Inc., the makers of Carole Little, operating under the banner of CL Fashion Corp., will be back in bankruptcy court today to obtain final court approval for $1.4 million in interim financing to fund operations for approximately eight weeks, according to attorneys for the unsecured creditors committee.
Although Chorus Line Corp. has not ruled out a reorganization plan, the current deal on the table “contemplates the sale of assets in eight weeks, not reorganization,” said Steven Gubner, an attorney representing the unsecured creditors committee.
Gubner objects to the eight-week sell-off period, because he claimed that it will take longer to sell off the assets, which includes the two trademarks.
“I would like to see the debtor either sell and/or license the trademark at a maximum value to create sufficient monies, take GMAC out and enable unsecured creditor body [to] see some recover,” said Mark Brutzkus, an attorney for the creditors.
Chorus Line Corp. converted an earlier Chapter 7 liquidation to a Chapter 11 reorganization in mid-December.
According to court papers, the combined liabilities of the two firms are about $80 million. Of that, about $37 million is owed to GMAC Commercial Credit; $31 million is owed to Levine Leichtman Capital Partners Inc.; $1 million is owed to employees; and $11 million represents unsecured trade credit.

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