Aeropostale has filed with the U.S. Bankruptcy Court to sue Hilco Merchant Resources, Gordon Brothers Retail Partners, and Aero Opco over a $1.3 million vendor deposit.
According to an article on Bankrupt Company News, Aeropostale has filed with the U.S. Bankruptcy Court to sue Hilco Merchant Resources, Gordon Brothers Retail Partners, and Aero Opco. The companies allegedly did not return a $1.3 million vendor deposit.
Hilco Merchant Resources, Gordon Brothers Retail Partners, and Aero Opco had a contract with Aeropostale. The brand put about $1.3 million down on a shipment of products, which both Hilco Merchant Resources and Gordon Brothers Retail Partners purchased.
The companies were used to liquidate some of the brand’s inventory. The deposit was made in July 2016, just a couple of months after Aeropostale filed for chapter 11 bankruptcy. It is currently not known when the contract was made.
The filing explains,
“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’).”
It continues to explain,
“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.”
This comes just a couple of weeks after Aeropostale filed with the U.S. Bankrutpcy Court to change its name corporate name to “ARO Liquidation”.
It was said that Aeropostale would relaunch as a smaller brand after being acquired by a retail group led by Simon Property Group Inc. and General Growth Properties Inc. but it seems it might not. Aeropostale’s filing to change its corporate name to “ARO Liquidation” shows the brand will still probably go out of business.
So, what do you think? Is Aeropostale going out of business? Let me know the comments below. Also, don’t forget to subscribe to get new posts sent directly to your inbox and follow me on Facebook, Instagram, and Snapchat.
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