Peekay files lawsuit after credit card processor terminates agreement

By Caroline Salls

Pittsburgh, Aug. 28 – Peekay Acquisition, LLC filed a lawsuit Monday against credit card processor Woodforest National Bank, alleging that the bank is violating the automatic stay imposed by Peekay’s bankruptcy filing by unilaterally shutting down Peekay’s credit card processing system, according to a filing with the U.S. Bankruptcy Court for the District of Delaware.

Peekay said it is seeking an injunction requiring Woodforest to perform its obligations under the processing agreement and prohibiting it from taking any actions to terminate the agreement.

“Peekay also seeks to recover damages and its costs and attorneys' fees from defendant for willfully violating the automatic stay,” the complaint said.

The company said Peekay is not in default under the Woodforest agreements, and all pre-bankruptcy amounts owed to Woodforest Bank have been paid.

According to the lawsuit, Woodforest said its sole reason for attempting to terminate the agreements was Peekay’s Chapter 11 bankruptcy filing.

Ultimate parent and Chapter 11 debtor Peekay Boutiques, Inc. is a retailer of lingerie, women’s wellness and sexual health products based in Auburn, Wash. The company filed bankruptcy on Aug. 10 under Chapter 11 case number 17-11722.

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