MELBOURNE: Creditors of fashion wholesale group Mercury Brands have been thrown a lifeline.
A recent creditors meeting saw them unanimously support a proposal put forward by Mercury Brands directors, vowing to provide them with full repayments over a period of three to five years.
The repayments would come as a result of royalties received from the sale of Mercury Brands assets to clothing company Australian Horizons. As reported in Ragtrader magazine's October 23 issue, Australian Horizons purchased 20 men's, women's and children's brands from the company just weeks after it entered into administration.
In addition to an upfront payment for these assets, Australian Horizons agreed to pay Mercury Brands a five per cent royalty fee on group-owned labels and two per cent on third-party licenses for up to 10 years.
Mercury Brands has now revealed Australian Horizons also purchased trade mark assets of Little Goose Clothing, a subsidiary of the company. Royalties from this sale are also expected to go towards the repayment of creditors.
Mercury Brands administrators anticipate the agreement with creditors will be executed within coming days, while employee claims are expected to be resolved and paid before Christmas.
The public company aims to end its voluntary trading suspension and relist on "as soon as practical".