Brooks Brothers’ Owners Sued for Questionable Chapter 11

Claudio Del Vecchio, the owner of Brooks Brothers, and his son Matteo Del Vecchio were sued on May 17 over a questionable Chapter 11 filing. Investors TAL Apparel, Ltd and Castle Apparel, Ltd alleged the two men filed in bad faith. They asserted the Del Vechhios refused to consider bids for the company and instead drove it into bankruptcy to reduce the amount owed to its minority shareholders.

TAL invested $100 million in Brooks Brothers in 2016 at the request of the Del Vecchios. It claimed it received assurances that any sale of Brooks Brothers for less than its existing $652 million valuation would trigger a make-whole provision that allowed TAL to recoup its investment in full. Instead, the company filed for bankruptcy, and TAL now stands to lose its entire investment.

TAL and C...

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