US: London Fog files for Chapter 11, to sell Pacific Trail
Rainwear and outerwear maker London Fog Group Inc has filed for bankruptcy protection for the second time in seven years and says it intends to sell its Pacific Trail outerwear business.
The Seattle-based company blamed the filing on a lack of cash and financing to properly fund its operations.
"We find ourselves without sufficient capital to fund the full group's expected growth," said London Fog chief executive officer David Greenstein in a statement.
In court papers lodged with the US Bankruptcy Court for the District of Nevada in Reno, the manufacturer listed debts of US$93m and assets of $59.84m. It also said a $40m debtor-in-possession loan is being provided by Wachovia Bank NA.
As part of its reorganisation plan, London Fog hopes to sell the Pacific Trail business which it acquired in the early 1990s.
An offer of $14.5m has already been tabled by Miami-based clothing designer Perry Ellis International - but it is likely that an auction will take place to try to get a higher price for the brand.
London Fog previously filed for bankruptcy protection in 1999. It emerged from Chapter 11 in April 2001, and said it had eliminated its long-term debt. Under that reorganisation, London Fog liquidated all but 35 of its factory outlet stores.
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