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GBG USA eyes approval to add new debtor to case, sell Sean John brand
By Sarah Lizee
Olympia, Wash., Dec. 2 – GBG USA Inc. is seeking to add GBG Sean John LLC as an additional debtor to its Chapter 11 cases so that it can pursue a sale of the Sean John brand, according to motions filed Wednesday with the U.S. Bankruptcy Court for the Southern District of New York.
The company originally filed bankruptcy to sell its fashion brands, and have since engaged in a marketing process to sell substantially all of the assets. The company has already sold several of its brands, including Aquatalia, Ely & Walker and Tahari.
The company had also considered selling the Sean John brand, which is a joint venture with celebrity Sean Combs. However, given that GBG Sean John was not an initial debtor, GBG USA had planned to structure the sale as a stock sale of the debtors’ 90% equity stake in the joint venture. But, GBG didn’t have requisite consent from its joint venture partner to file the entity for bankruptcy.
“While several potential bidders expressed interest in the Sean John brand, as the marketing process developed over the past several months it became apparent that selling the debtors’ equity in a non-debtor entity presented significant obstacles for certain bidders, posed execution risk, and stifled competition,” GBG said.
The company then pivoted to a 363 asset sale, and received a stalking horse bid from Sean Combs, while also securing his consent to put the entity into bankruptcy.
The purchase price under the stalking horse agreement is $3.3 million.
New York-based GBG USA is primarily engaged in operating the wholesale and direct-to-consumer footwear and apparel business in North America. The company filed bankruptcy on July 29 under Chapter 11 case number 21-11369.
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