Coldwater Direct, LLC
- Liquidation of large inventory of women’s clothing through Chancery Court overseen sale process
- Sale included trademark and copyright interests
- Liquidation retired all unpaid state sales tax claims
Coldwater Direct was the successor to the failed bankrupt Coldwater Creek women’s clothing stores and e-commerce business. The company, along with its related companies, executed assignments under Delaware law to accomplish the liquidation. A group of unsecured creditors were concerned that the assignment for the benefit of creditors was an attempt to leave unsecured creditors without recovery and preserve value for the equity sponsor. These claims were addressed by the assignee and counsel, and ultimately resolved with approval of the Chancery Court. The assignee determined that a valuation of the brand name was required and retained an expert to conduct the valuation. The valuation report was of significance in getting the overall matter resolved.
The assignee was ultimately able to make two distributions to unsecured creditors, after paying the secured and priority tax creditor claims. Total recovery for unsecured creditors was approximately 8% of their allowed claims.