Lucky Brand Files for Bankruptcy as Latest Retail Casualty of Coronavirus

Canada Restricts Dealings With Hong Kong Over New Security Law

OTTAWA—Foreign Affairs Minister Francois−Philippe Champagne says Canada is suspending its extradition treaty with Hong Kong as part of a package of responses to the new security law China has imposed on the territory. In a statement, Champagne says Canada will also treat sensitive goods being exported to Hong Kong as if they were being sent to mainland China. That means outright banning some military−related goods from being traded there. China imposed strict new controls on Hong Kong this week, in what Champagne calls a violation of the “one country, two systems” philosophy that was supposed to last 50 years after Britain returned Hong Kong to China in 1997. Champagne’s statement says Hong Kong’s place in the global economy was based on that promise and needs to be reassessed. Canada’s moves…

Apparel company Lucky Brand Dungarees is filing for Chapter 11 bankruptcy, it said on July 3, becoming the latest retailer to fall victim to the coronavirus pandemic.

The firm said it had entered into a “stalking horse asset purchase agreement” with SPARC Group LLC, which owns brands such as Aeropostale and Nautica, for the sale of “substantially all” its operating assets.

Such a pact sets a starting bid or minimally accepted offer as a threshold for other potential buyers if they want to bid.

Lucky Brand estimated both assets and liabilities in the range of $100 million to $500 million, its filing in the U.S. Bankruptcy Court of Delaware showed.

A view of a temporarily closed JCPenney store at The Shops at Tanforan Mall in San Bruno, Calif., on May 15, 2020. (Justin Sullivan/Getty Images)

The Neiman Marcus store is seen during the outbreak of the coronavirus in New York City, on April 19, 2020. (Jeenah Moon/Reuters)

“The COVID-19 pandemic has severely impacted sales across all channels,” the firm’s interim chief executive, Matthew Kaness, said in the statement.

“While we are optimistic about the reopening of stores and our customers’ return, the business has yet to recover fully.”

ABG-Lucky, a newly-formed unit of Authentic Brands Group, the brand manager which bought Barneys New York out of bankruptcy, will buy the intellectual property of Lucky Brand, the statement added.

The company said it had received new financing commitments from some existing lenders to ensure enough liquidity to fund the business through the closing of the sale.

The statement did not specify the amount of the commitments received, adding that the company would operate its business during the Chapter 11 process.

Lucky Brand, founded in Los Angeles in 1990, joins a growing roster of apparel retailers pushed towards bankruptcy by the virus. J Crew Group, JC Penney, and Neiman Marcus each filed for bankruptcy in May.

By Kanishka Singh

Focus News: Lucky Brand Files for Bankruptcy as Latest Retail Casualty of Coronavirus

Nasdaq-Listed Chinese Company Cheated Creditors by Using Fake Gold as Loan Collateral

Nasdaq-listed Chinese jeweler Kingold Jewelry Inc. (KGJI) has received 20 billion yuan ($2.8 billion) loans by claiming to use tons of gold as collateral in the past five years. However, the creditors discovered that some of the gold bars are gilded copper alloy. The loans were protected by insurance issued by Chinese state-run PICC Property and Casualty Company (PICC) and some smaller insurers. But the insurers refuse to pay for the loss of Kingold’s creditors by claiming that the insurance contracts defined that they won’t take care of the loss that was created by the policyholder. However, the creditors emphasized that the insurance agreement ruled that insurers will take responsibility if the gold that is supplied by the policyholder doesn’t meet the standard. Kingold designs and manufactures jewelry. It was…