In 2020, he told the New York Times that none of the sales and investment discussions “met the needs we saw”. The TAL lawsuit, which also cites the Del Vecchio family holding company, Delfin, as a defendant, alleges that none of the discussions with the board of directors or shareholders were shared. Like many global apparel suppliers, TAL, which owns 11 factories and reportedly employs over 26,000 people, was hit hard by the volatility caused by the outbreak of the pandemic. At one point, apparel production fell to just 30 percent of group capacity due to the drop in demand from retailers, resulting in the permanent closure of several factories and a relocation to the manufacture of personal protective equipment.
In August 2020, Brooks Brothers was sold to SPARC Group, a joint venture between Simon Property Group, the largest mall operator in the United States, and Authentic Brands Group for $ 325 million, after stores closed on their balance sheets had led to chaos, a licensing company. TAL is also an unsecured creditor in bankruptcy proceedings.
Paul Lockwood of Skadden, Arps, Slate, Meagher & Flom, lawyer for Claudio Del Vecchio, said: “The allegations in the complaint are false and we expect the court to dismiss the case.” Katie Jakola of Kirkland & Ellis, the law firm representing TAL, said they’d look forward to her day in court.
However, some observers doubt that it will come to that.
“This appears like two rich parties are making complaints,” said William Susman, chief executive officer at Threadstone Advisors. “The owners of the Brooks Brothers have already endured their pain. TAL is a large, demanding company. Hard to feel they were betrayed. Sounds like a settlement is in everyone’s future. “
Elizabeth Paton contributed to the coverage.
