The Company had been sued in the Civil Court of the City of New York by the court appointed Receiver of the property for approximately $7.1 million dollars in past due and unpaid rent.
Hampshire’s position in the litigation was that construction work required as part of its lease was not completed to schedule and as a result, the Company was not obligated to pay full rent during certain past periods.
Following a 22-day trial, the Court ruled on June 10, 2013 that Hampshire Group was entitled to a rent abatement for all but $181,314.53 of the plaintiff’s claim.
The Company has accrued approximately $6.1 million for disputed unpaid rent and is considering the appropriate accounting treatment of this accrual. Additionally, the Court awarded Hampshire Group legal fees and expenses for their defense in this litigation.
A separate hearing is currently scheduled to be held in July 2013 on the amount of the reimbursable legal fees. Hampshire Group was represented by Bryan Cave LLP.
The Receiver maintains the right to appeal the decision. “We are extremely pleased with the outcome of the trial and are glad to have this issue favorably resolved,” said Paul Buxbaum, CEO of Hampshire Group. “Looking ahead, we remain focused on subletting the excess space, while we work to grow the business and make the Company more efficient.”
About Hampshire Group
Hampshire Group, Limited, along with its wholly-owned subsidiaries, Hampshire Brands, Inc. and Rio Garment S.A., is a provider of fashion apparel across a broad range of product categories, channels of distribution and price points.
The Company specializes in designing and marketing men’s sportswear to department stores, chain stores and mass market retailers under licensed brands, our own proprietary brands and the private labels of our customers. The Company operates a Honduras-based apparel manufacturer, designing, sourcing and manufacturing knit tops for men, women and children.
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