Forever 21’s $81 Million USD Bankruptcy Deal Gets Preliminary Court Approval
At a hearing on Tuesday, fashion brand Forever 21 has managed to persuade the bankruptcy court in Delaware that its $81.1 million USD deal with Authentic Brands Group is the only viable way forward. The deal also includes landlords Simon Property Group and Brookfield.
Vendor and exporter groups opposing the new deal have voiced concerns over whether they’ll be paid after the new deal, as proceeds may go towards secured lenders first. However, Forever 21 maintains that the arrangement will also be beneficial to vendors and exporters, since (on top of the $81.1 million acquisition price) ABG will also provide upward of $20 million USD to pay for the goods the fashion brand has accepted in the last two weeks, as well as up to $53 million for other goods it has purchased. According to the filing, the buyers will even assume the estimated “hundreds of millions of dollars” of purchase orders that are currently still in transit or have yet to leave warehouses.
For these reasons, Judge Gross concluded that ““Clearly, this is the only bid, and the alternative is liquidation, which is certainly not in anyone’s interest.”
Elsewhere in business-related news, WhatsApp has passed the two billion user milestone.