A Manhattan judge on Tuesday granted permission for Shoe Mania Holding LLC’s creditors to appoint an interim trustee to guard the assets of the firm, which is being forced into bankruptcy — if the assets can be found.
Shoe Mania’s lawyer, Paul Sod, claims there is inventory comprising between 20,000 to 25,000 pairs of shoes sitting, locked, in a warehouse in Queens, N.Y. Sod also claims Bank Leumi USA, another of Shoe Mania’s creditors, holds the key to this warehouse.
Bank Leumi’s lawyer denied his client’s possession of the key on Tuesday.
“It’s news to me,” said the attorney from Warshaw Burstein Cohen Schlesinger & Kuh LLP.
The court was baffled by the whereabouts of the inventory.
“The existence, nature, quantum and value of any property is not spelled out at all. … Fiduciary control has to be taken to the extent that there are any real assets here,” said Judge Burton Lifland, before granting the application to appoint an interim trustee.
Shoe Mania’s lawyer, Paul Sod, first sent a letter out to the firm’s creditors on July 19 informing them it was in the process of liquidation and that all the stores were closed. Ten footwear firms are now jointly seeking to recover $3.4 million in unpaid claims and to force the chain to declare involuntary Chapter 7 bankruptcy.
Puma North America Inc. is the largest creditor with claims totaling $1.1 million. Earth Inc. is the smallest, with a debt of about $28,000.
Other footwear firms owed include VF Outdoor Inc., Converse Inc., New Balance Athletic Shoe Inc. and Skechers USA Inc.
Sod also said Shoe Mania faces claims from 150 other creditors, which are not named in this particular suit.
Lawyers for the creditors, from Cooley LLP, told Footwear News after the hearing, “We got exactly what we wanted.”
They added that the imminent sale of Shoe Mania’s leases will add to the value of the firm’s assets.