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London Fog Group files for Chapter 11, plans asset sale
23 Mar '06
3 min read
Rainwear manufacturer The London Fog Group has initiated a major financial restructuring of its business which includes the Pacific Trail outerwear business; the London Fog luxury apparel brand which has been relaunched to critical acclaim; and Homestead, a successful home textile business.
To effect the restructuring, London Fog Group has filed a voluntary petition to reorganize under Chapter 11 of the United States Bankruptcy Code. It is pursuing the Chapter 11 filing principally as a result of the group being unable to secure sufficient working capital and other financing to properly fund its operations.
The petition was filed in the US Bankruptcy Court for the District of Nevada, in Reno. Subject to court approval, the company plans to continue to operate its business under Chapter 11, as it implements its restructuring.
Supporting London Fog Group's working capital needs during its reorganization, Wachovia Bank, N.A. has agreed to provide London Fog Group with $40 million in debtor-in-possession (DIP) financing. The Company is currently seeking Bankruptcy Court approval of the financing package.
A major first step in its financial restructuring, the Company has determined to pursue a prompt sale of its Pacific Trail outerwear business. Upon court approval, London Fog Group will hold an auction for the assets of Pacific Trail in the immediate future.
The company has entered into an asset purchase agreement with Perry Ellis International to acquire the Pacific Trail brands for a total cash purchase price of $14.5 million, subject to adjustment and to Perry Ellis rights of continuing due diligence for a limited period in accordance with the terms of the agreement.
To effect the restructuring, London Fog Group has filed a voluntary petition to reorganize under Chapter 11 of the United States Bankruptcy Code. It is pursuing the Chapter 11 filing principally as a result of the group being unable to secure sufficient working capital and other financing to properly fund its operations.
The petition was filed in the US Bankruptcy Court for the District of Nevada, in Reno. Subject to court approval, the company plans to continue to operate its business under Chapter 11, as it implements its restructuring.
Supporting London Fog Group's working capital needs during its reorganization, Wachovia Bank, N.A. has agreed to provide London Fog Group with $40 million in debtor-in-possession (DIP) financing. The Company is currently seeking Bankruptcy Court approval of the financing package.
A major first step in its financial restructuring, the Company has determined to pursue a prompt sale of its Pacific Trail outerwear business. Upon court approval, London Fog Group will hold an auction for the assets of Pacific Trail in the immediate future.
The company has entered into an asset purchase agreement with Perry Ellis International to acquire the Pacific Trail brands for a total cash purchase price of $14.5 million, subject to adjustment and to Perry Ellis rights of continuing due diligence for a limited period in accordance with the terms of the agreement.
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