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Italian Company (our Debtor) Chapter 11

Italian Company (Debtor) Chapter 11 - been advised we won't be paid

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Hello everyone

Hoping that someone can give me a more definitive answer than 'google' this morning please....

Been advised by one of our debtors (an Italian company) that we are not going to be paid for 4 months as they are entering a 'chapter 11' and are not paying any of their suppliers for 4 months.  A quick 'google' (always dangerous I know) indicates that there is such a thing as a Chapter 11 bankruptcy:

NEW YORK, May 18 (Reuters) - The billionaire Italian family that until recently owned Brooks Brothers has been accused in a lawsuit of driving the iconic apparel retailer into bankruptcy instead of selling it, to avoid paying millions of dollars to an investor.

In a complaint on Monday, Hong Kong clothing maker Tal Apparel said Claudio Del Vecchio and his son Matteo pressured it to invest $100 million in Brooks Brothers in 2016, and promised it would be "made whole" if they later sold the retailer for less than $652 million.

The complaint said the Del Vecchios lined up "several" bids for Brooks Brothers in 2019, before the COVID-19 pandemic, but did not pursue them because they would owe Tal money, and even asked if Tal would take a "haircut" on any payment.

Instead, the family put Brooks Brothers into Chapter 11 last July, making Tal's original investment "nearly worthless," according to the complaint in Manhattan federal court.

They've advised us that future invoices that we might submit for the ongoing work that we are booked in to complete will be paid within 14 days - understandably am very nervous to believe that.

Any guidance / confirmation of our suspicions gratefully received (as always) - thanks very much for your help. 

Replies (5)

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Lisa Thomas
By Lisa Thomas - Insolvency Practitioner
17th Jan 2022 12:12

Hi Yes Chapter 11 is a legitimate procedure, effectively copied from US law.

I don't know much about them. but believe there are two types - out of Court, or in Court procedure.

Has your client stated which procedure they are using?

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By jane
17th Jan 2022 13:31

Thanks for the reply Lisa - I have sent a private message.

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By Brend201
17th Jan 2022 18:00

Why would you believe them when they say that they will pay new invoices in 14 days? Have they become miraculously solvent? If they can pay in 14 days, they can pay before despatch.
And don't forget: "Fool me once, shame on you. Fool me twice, shame on me."

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By Brend201
17th Jan 2022 18:00

Why would you believe them when they say that they will pay new invoices in 14 days? Have they become miraculously solvent? If they can pay in 14 days, they can pay before despatch.
And don't forget: "Fool me once, shame on you. Fool me twice, shame on me."

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By Brend201
17th Jan 2022 18:00

Removed duplicate.

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