Tuesday was a busy day in court for BCBG Max Azria Global Holdings LLC’s bankruptcy case.
The company — which went into its bankruptcy with about $200,000 in cash — now has assurance of post-petition financing with a judge approving an $80 million debtor-in-possession loan, $45 million of which is new money from the company’s lenders. BCBG earlier this month received court approval to tap into as much as $15 million on that $45 million in new financing in an interim order.
The deadline for the company’s sale was also approved with the deadline to receive all bids May 19 with an auction, if necessary, to be held by May 24.
BCBG is in the midst of shuttering 120 doors, which it received approval to do at the same time the judge overseeing its case allowed the company to begin drawing down on its DIP financing. The stores set to close are a mix of the company’s namesake brand along with outlets and some under the BCBGeneration and Hervé Léger banners. The closures are expected to be completed by the end of April.
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The company’s Canadian business — totaling 51 stores — will be wound down by May 31.
Meanwhile, a lawsuit filed against BCBG by founder Max Azria and his wife and the company’s former creative director Lubov Azria continues. The Azrias filed their complaint last week. At the center of the issue are two contracts signed in 2015 between Lubov and the company. The company believes it should be allowed to toss out the employment agreement with Lubov, while keeping intact the separate contribution agreement related to the designer’s stake in the business and shareholder rights. Counsel for the Azrias argue the two contracts are related.
BCBG filed for bankruptcy in early March, challenged by a tough competitive landscape and weighed down by expensive store leases at a time when chief restructuring officer Holly Felder Etlin said in court documents the business should have turned to focus on potential growth in wholesale and intellectual property deals.