New Chapter 11 Filing - Cornerstone Apparel Inc. (d/b/a Papaya Clothing)

Cornerstone Apparel, Inc. (d/b/a Papaya Clothing)

  • 6/15/17 Recap: California-based apparel retailer targeted to the 16-25 year-old demographic and with 80 stores located in malls and shopping centers throughout the US filed for bankruptcy to take advantage of the Bankruptcy Code's "automatic stay" and have time to evaluate and rationalize its retail store footprint. Sadly, the company opted to expand at PRECISELY the wrong time as it opened approximately 50 stores in the last 6 years, incurring significant setup/startup costs in the process. Now it will need to engage in extensive negotiations with landlords to determine what, if anything, it can reorganize around. As part of the filing, the company has already identified 30 locations that it intends to exit from, if it hasn't already.
  • Jurisdiction: C.D. of California (Judge Zurzolo)
  • Capital Structure: No secured debt.   
  • Company Professionals:
    • Legal: Levene Neale Bender Yoo & Brill LLP (Timothy Yoo, Eve Karasik, Juliet Oh)
    • Claims Agent: Rust Consulting/Omni Bankruptcy (*click on link above for free docket)
    • Other Parties in Interest:
      • Official Committee of Unsecured Creditors
        • Legal: Lewis Brisbois Bisgaard & Smith LLP (Scott Lee, Lovee Sarenas)

Updated 8/10/17