Aerogroup International Inc., the bankrupt shoemaker behind Aerosoles, filed a temporary restraining order and request for preliminary injunction last week in Delaware bankruptcy court seeking to stop the $1.4 billion sale of Global Brands Group to Differential Brands Group Inc.
The deal, which was announced in June, would transfer most of Hong Kong-based GBG’s North American licensing business to DBG, including licensed brands such as Calvin Klein, Under Armour, Tommy Hilfiger, BCBG, Bebe, Frye, Michael Kors, Cole Haan and Kenneth Cole. It would also leave Aerogroup high and dry in its pursuit of more than $45 million in contract claims against GBG, the shoemaker contends, following an abandoned bankruptcy sale.
In a letter filed with the court, Aerogroup’s lawyer, Eric D. Madden of the law firm Reid Collins & Tsai LLP, outlined the complaints against GBG, stating that it entered an asset purchase agreement with the company in December 2017, agreeing to purchase Aerogroup’s inventory, leases and distribution contracts, as well as license the manufacture and sale of its products. The projected value of the deal, according to Aerogroup’s investment banker, Piper Jaffray & Co., was between $49 million and $56 million.
In the month following, according to the letter, the shoe brand continued to place inventory orders to the tune of $12.4 million, which GBG approved. Then the conglomerate abruptly terminated the agreement minutes before the confirmation hearing, leaving Aerogroup in default with its lenders and forcing it to accept a much lower bid — $23.34 million — from New York-based hedge fund Alden Golden Capital LLC.
The court has granted Aerogroup’s request for a temporary restraining order, ordering GBG to hold and not distribute $45.06 million of any proceeds from a sale to DBG, and will hear the company’s request for a preliminary injunction on Tuesday afternoon.