Update
11/14:
JLM Couture Progressing Through Financial Restructuring
JLM Couture, Inc., indicated recently that its voluntary decision to file for restructuring under Subchapter V of the US Bankruptcy code is progressing as expected, with the company moving quickly through the process.
“This has been a challenging experience but we’re working toward creating a restructuring plan that enables us to continue to deliver top-tier designs to our clientele and emerge as a much stronger company,” explained JLM CEO Joe Murphy. “And we are very grateful for the support shown by our loyal stores and partners.”
According to Murphy, the disruptions in the JLM supply chain there were cited as partially the reason for the bankruptcy protection filing are smoothing out to the point that the company is taking new re-orders on over 150 active styles, and anticipates launching new styles for the coming season as the restructure process completes.
JLM Couture made the decision to pursue a financial restructuring based on external challenges including the “extensive damage” caused by the years-long and ongoing litigation and social media actions involving past JLM Couture designer Hayley Paige Gutman, the effects of the pandemic and corresponding supply chain disruptions, and New York city real estate issues.
Its October 2 filing was for restructuring, not liquidation, through a sub chapter of the US Bankruptcy code that enables smaller businesses with limited debt an option to safeguard assets and continue operations through a weeks-long process rather than multi-months.
Originally posted 10/3
JLM Couture, Inc., the upscale, multi-label wedding gown design and manufacturing company and only publicly traded company in the industry, announced today that it made the voluntary business decision to file for restructuring under Subchapter V of the US Bankruptcy code.
This filing is for a restructuring, not a liquidation or Chapter 11 bankruptcy filing, and is specifically designed for smaller businesses with limited debt, providing an avenue to safeguard assets and continue operations.
Under subchapter V, a business is allowed a 3-5 year business debt repayment plan; has reduced reporting requirements; enables the business owner only to put forth a reorganization plan (rather than a credit committee) that the court can confirm without creditor approval, and is generally a weeks-long process instead of months-long.
According to a company spokesman, the decision to pursue a financial restructuring was based on external challenges including the “extensive damage” caused by the years-long and ongoing litigation and social media actions involving past JLM Couture designer Hayley Paige Gutman, the effects of the pandemic and corresponding supply chain disruptions, and New York city real estate issues.
Operations will continue as usual throughout the court-supervised process, according to JLM, including efforts to meet customer expectations and fulfilling orders as it works to restructure its business.
According to the spokesperson, JLM Couture is actively working out a restructuring plan with its trade vendors and professional creditors, and is committed to “delivering top-tier designs to its clientele and is hopeful that this restructuring will fortify its position and enable the Company to return to a position of strength in the wedding gown industry.”
In a letter to its store base announcing the filing, JLM Couture stated:
“While the Company hasn’t made any public statements out of respect for the Courts, retail partners, and others affected by the ongoing litigation, we are heartbroken to witness firsthand the effects weaponization of social media combined with false statements have had on our employees, vendors, and retail partners.
“Throughout its history, JLM has taken pride in providing job security for its cherished employees, many of whom count their tenure not just by years, but by decades. JLM has been a place for talented designers to flourish under the Company umbrella with access to full funding and design, manufacturing, and marketing support. JLM Couture, a company composed of 75 percent women, with a leadership team that reflects that, has been a champion of many female-owned small businesses, supporting its retailers for the past three decades.”
JLM will not be showing at New York Bridal Market this October in an effort to manage new costs and expenses.