APPAREL AMERICA FILES CH. 11, HOPES TO SELL
Byline: Vicki M. Young
NEW YORK — Swimwear maker Apparel America Inc. filed for Chapter 11 bankruptcy court protection Friday, and it is seeking court approval of a proposed sale of the company.
Apparel America, which makes swimwear for its Roxanne and Robby Len labels and does private label programs for retailers and catalog companies, filed its petition in Manhattan bankruptcy court.
Jeffrey Koffman, president of Apparel America, said in an affidavit filed with the petition that the company encountered financial difficulties because of its inability to compete with companies that manufacture overseas.
Apparel America, according to Koffman, has been for sale for more than a year. Koffman said he believed the terms of the union agreements for its Connecticut facilities in New Haven and Hartford prevented the firm from being “competitive.”
Terms of the offer, which is subject to bankruptcy court auction, were not immediately available. The identity of the proposed purchaser is not known.
Apparel America expects to complete orders of more than $900,000 by the end of July, and is preparing new samples and styles for the holiday/ cruisewear season. BNY Financial Corp., its factor, will continue to fund the company’s operations.
The firm listed liabilities of $34.9 million. Its creditors’ list was not available at press time.
Assets of $23.8 million include $7.8 million in inventory, $1.3 million in machinery and equipment, and $8.3 million in accounts receivable, factored with BNY Financial.
Apparel America operates from five locations: a showroom here at 1411 Broadway, a distribution and shipping center in New Haven at 1175 State Street, a cutting and sewing facility in Hartford at 1429 Park Avenue and two satellite showrooms, one at the Miami International Merchandise Mart and the other in Los Angeles at 110 East Ninth Street.
An arbitration award of $1.6 million was rendered against the company on June 2 in favor of its union.
The company is also party to an arbitration proceeding connected with a discrimination complaint filed last November by a former executive seeking reinstatement and back pay.