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Aeropostale Bankruptcy Complaint Filed

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Aeropostale filed with the U.S. Bankruptcy Court a complaint against Hilco Merchant Resources, Gordon Brothers Retail Partners and Aero Opco (Defendants).

Aeropostale argues, “Plaintiffs bring this action to obtain an order directing Defendants to turnover $1,335,471.84, the amount of a vendor deposit made by the Debtors to Star Fancy Holdings in July 2016 as a prepayment for certain goods, that Defendants are wrongfully withholding from the estates. On September 13, 2016, shortly after the Debtors paid the Deposit to Star Fancy, the Court approved the sale of substantially all of the Debtors’ business to Aero OpCo (the ‘Sale’).”

In addition, “In connection with the Sale, the Debtors and Aero OpCo designated a joint venture composed of Hilco and GB to serve as their exclusive Agent for purposes of selling certain inventory including that which was subject to open purchase orders at the time of the Sale, including the goods that the Debtors purchased from Star Fancy. Vendor deposits, like the Star Fancy Deposit, were expressly excluded from the Sale. Under the terms of the Purchase Agreement and Agency Agreement, the Agent, upon delivery of goods subject to a vendor deposit paid by the Debtors, is required to reimburse the Debtors for the full amount of the vendor deposit. In October 2016, Star Fancy delivered the goods subject to the Debtors’ prepayment Deposit, thus triggering the Agent’s obligation to reimburse the Debtors for the Deposit. The Debtors promptly demanded that the Agent turn over the full amount of the Deposit to them. The Agent has refused to do so.”

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