L&L Wings committee supports proposed settlement with Beach Mart

By Sarah Lizee

Olympia, Wash., Jan. 13 – L&L Wings, Inc.’s official committee of unsecured creditors said it supports a proposed settlement between the debtor and Beach Mart, Inc., according to a statement filed Thursday with the U.S. Bankruptcy Court for the Southern District of New York.

The committee said that, if approved, the settlement would resolve all outstanding disputes between the company and Beach Mart.

“This resolution, absent an unforeseen and unforeseeable turn of events, would in turn allow for the submission of a consensual plan of reorganization that would permit the debtor to reorganize as a going concern within the first quarter of 2022,” the committee said in its statement.

L&L Wings said the settlement fully resolves 11 years of contested and costly litigation between the parties, all disputed issues over the plan of reorganization, claims asserted by Beach Mart against the company, and the Chapter 11 case as a whole.

Specifically, the settlement resolves all pending disputes and litigation concerning Beach Mart’s claims against the debtor and Beach Mart’s ownership of and the debtor’s ability to license and use the “WINGS” trademark and trade style on a going forward basis without the need for any further litigation both in the North Carolina District Court and bankruptcy court.

Under the settlement agreement, all pending litigation will be resolved or dismissed, and Beach Mart will vote its claims in favor of and affirmatively support a plan of reorganization.

The debtor will pay to Beach Mart on the effective date of the plan $10.69 million, which is 50% of Beach Mart’s proof of claim amount of $21.39 million.

Beach Mart will grant the debtor a four-year trademark license to use the “WINGS” mark in the debtor’s existing Wings stores. There will be a royalty of $750,000 due at the beginning of each year, and a two-year minimum for royalty payments.

The New York-based beachwear and beach sundry items retailer filed bankruptcy on April 24, 2021 under Chapter 11 case number 21-10795.

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