Still reeling from allegations of rape and sex trafficking against apparel magnate Peter Nygard, the Nygard Group of Companies filed a notice of intention to file a proposal pursuant to the Canadian Bankruptcy and Insolvency Act Tuesday night. A statement issued by a company spokesman stated the decision to restructure and seek financial support was done in order “to protect the livelihood of thousands of dedicated employees,” as well as retail customers, vendors and suppliers.
The statement said the filing does not mean that the company is bankrupt or in receivership, noting long-term financial stability is being sought. “In the interim, it is ‘business as usual’ at the company and at its retail stores,” the statement read. The filing was made in the Office of the Superintendent of Bankruptcy Canada in Ontario.
For the restructuring, the company plans to work with several advisers including a trustee who will oversee the NOI.
The statement added, “Nygard and the company look forward to exposing the extent of the alleged conspiracy, clearing Nygard’s name and the company brand, and restoring the company to its former glory. Nygard and the company thank the employees, retailer customers, vendors and suppliers who are standing with them against media bullyism and the ease at which, in today’s times, someone can be damaged by false information that is virally redistributed.”
The past few weeks have been anything but routine. Last month, 10 women, whose names have not been revealed, filed a lawsuit against Nygard alleging rape, sex trafficking and sexual assault. Some of the victims, including a few who were minors at the time, alleged they were plied with alcohol, and in some case pills by Nygard, before being raped or sodomized at “pamper” parties held at Nygard’s Mayan-inspired estate in the Bahamas.
The lawsuit filed in the U.S. District Court for the Southern District of New York listed Nygard, Nygard International Partnership and Nygard Holdings Ltd. as the defendants. The 99-page suit claims they were “instrumental in knowingly aiding, abetting, facilitating and participating in defendants’ decades-long sex-trafficking scheme.” Some of the alleged victims, including a few who were said to be underage at the time of the alleged attacks, said they were lured with the prospect of modeling contracts.
The incidents were alleged to have occurred in the U.S., the Bahamas and “elsewhere around the world.” According to the filing, “Nygard used his considerable influence in the fashion industry, his power through corruption of officials and a network of company employees under his direction, to groom and entice underage girls and women.”
On Feb. 25, investigators from the Federal Bureau of Investigation and the New York Police Department raided Nygard’s New York offices at 1435 Broadway. Nygard, in turn, announced through a spokesman that he is stepping down as chairman of the Nygard Companies and will divest his ownership interest. In response to multiple allegations of rape, sexual assault and sex trafficking against Peter Nygard, Dillard’s said it will no longer carry his moderate sportswear label.
A few weeks ago the New York Times featured an investigative article chronicling the 15-year litigious and costly battle between Nygard, 78, and hedge fund billionaire Louis Bacon, 63. The warring rivals have neighboring waterfront properties in the Bahamas’ affluent Lyford Cay. The “epic battle” between the two adversaries has reportedly led to “tens of millions” and the filing of 25 lawsuits in five jurisdictions.
A spokesman for Bacon said Tuesday that, “We are not responding to comments from Nygard, his spokesman or attorneys.”
The spokesman referenced a statement Bacon issued February 22, following The New York Times report. “I admire the brave women, who had the courage to share their stories with The New York Times. I was not looking for this fight, but once I heard repeated, credible reports from disgusted whistleblowers that Mr. Nygard was abusing young, vulnerable women, I could not ignore this disturbing information. I sought to help and empower the alleged victims by connecting them with appropriate law enforcement authorities. That is where this matter belongs.”
Nygard’s statement addressed some of those issues, stating, “Over the past month, the company has been maliciously battered as a result of actions that were predicted in Nygard’s RICO [Racketeer Influenced and Corrupt Organizations Act] lawsuit against billionaire Louis Bacon. The lawsuit alleges that people were paid to make false statements and accusations about Peter Nygard, for the purpose of ruining him and his business. This was further revealed in a New York Times article that, despite publishing the heinous and vicious allegations as the lead to its fake news story, acknowledged that the credibility of the witnesses was suspect.
The statement put forth its own allegations, “With the paid for lawsuit against Nygard, the unfair publishing of The New York Times article, and the devastating media onslaught that merely republished the heinous allegations, damage was certain to occur. Although Nygard is supposed to be presumed innocent, following the filing of the recent lawsuits against Nygard, The New York Times article and the media onslaught afterward, a significant Nygard customer ceased doing business with the company.”
As a result, one of the company’s financial lenders “demanded immediate payment of its outstanding credit facility” and “refused to wait a few extra days for the new credit line to be finalized and instead took aggressive steps, which threatened the existence of the company,” according to the statement.
As of this morning, Nygard merchandise was still being sold via one major retailer: Sears. A Sears spokesman did not respond immediately to a query Tuesday morning.
The Nygard company has subleased most of its 30,000-square-foot Times Square offices at 1453 Broadway except for what was a sixth-floor apartment and is now primarily used for storage. Its nearby store a few doors south on Broadway remains open.