Aeropostale Plans to Auction Assets Post Bankruptcy Filing

by San Antonio Attorney

Aéropostale, otherwise known as Aero, is popularly known as a retailer of casual clothing and accessories in American malls.  The apparel targets teenagers in most of their fashion line but some adults also opt to wear their clothing as well.

The clothing line bears control over its proprietary brands through design, sourcing and marketing their own merchandise.

However, the clothing line is now preparing to sell all of its assets and can even bring claims against a private equity firm allegedly driving Aeropostale to bankruptcy.

The clothing line, based in New York, claimed that doing a reorganization following a standalone basis will not be feasible for the company.  According to court papers filed last July 15, the company aims to look for the potential stalking horse, which can make the lead bid through an auction next month.

Aeropostale is still in the process of reviewing 11,000 pages of documents and depositions.  These documents were produced by Sycamore Partners, a senior lender, during a bankruptcy probe.

The company filed for bankruptcy last May, with claims that Sycamore Partners collaborated with a supplier to initiate filing.  Aero Investors, the biggest secured lender, is also controlled by Sycamore Partners.

According to court papers filed in bankruptcy court, Aeropostale aims to seek judgment, which will prohibit or lower the claim of their bankruptcy.

From the beginning of bankruptcy filing, Aeropostale described the reorganization plans as ‘illusory’ and liquidation was the most realistic solution.

A lead bidder was the best candidate for the company’s future and this will be the key to the company’s financial security after the auction.

As of August 26, the U.S.  Bankruptcy Court filed a verdict siding with Sycamore Partners.  Aeropostale requested the Judge to bar Sycamore Partners from using $150 million owed in credit to bid in the auction, the judge did not allow the request.

Through a public statement, Aeropostale expressed its disappointment with the final decision.

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