As exclusively reported in Ragtrader’s October 7 edition, investment firm AR Management made an unsuccessful bid to purchase the designer womenswear chain after it was advertised for sale by administrators on September 13. The NSW Supreme Court has since cleared the way for legal action against the decision which saw Belinda International to its existing management.
The action was launched by former Ralph Lauren executive Gordon Devin, who was chief executive of Belinda International for the four years to 2009. Devin was also revealed to be a major creditor of the firm, with $284,740 outstanding on an intial loan of $300,000.
Court papers reveal Devin partnered with AR Management in its bid to acquire Belinda International, with the company agreeing to pay a $35,763 success fee in the event of a sale within a year. Devin would also earn $2500 a day for up to 20 days if AR Management acquired all business assets under Belinda International.
AR Management made its final offer of $2.35 million to administrators on September 20, with “Pool A” creditors to receive 100 cents in the dollar and “Pool B” creditors to receive 15 cents in the dollar. Under the terms of a Deed Of Company Arrangement (DOCA) put forward by Belinda International, the latter creditors were to receive just five cents in the dollar. The DOCA was approved at a creditors meeting on September 21, and the company continues to trade under founder and director Belinda Seper.
The NSW Supreme Court determined Devin was entitled to his day in court and blocked a challenge to proceedings by Belinda International. Middletons senior associate and corporate recovery expert Michael Forrest said the case could be finalised in months. In the event the DOCA be declared void, it could be sent back to creditors to reconsider the company’s future.
“[However] liquidation is the usual consequence of a DOCA being terminated and, generally, the company and creditors are not given a second chance to ‘fix’ the DOCA.”
Belinda International could not be reached for comment at time of press. AR Management has an investment in mycatwalk.com, which counts former Belinda International retail executive Marlene Mangioni as part of its team.
Alexander Wang: Belinda supplier.
