Companies in bankruptcy are typically at the mercy of the lenders that hold the purse strings. Teen clothing retailer Aéropostale Inc. is trying to tip the scales in its favor, the Wall Street Journal reported today. The company immediately took aim at lender Sycamore Partners after filing for bankruptcy yesterday, saying that the private-equity firm directed a company it controls to cut off credit to the struggling retailer, hastening its demise. Sycamore, a private-equity firm that focuses on retail and consumer investments, owns MGF Sourcing, which manufactures clothing for Aéropostale and other retailers. MGF earlier this year demanded Aéropostale pay for goods in advance instead of allowing it to pay after delivery. Aéropostale in 2014 signed a 10-year supply agreement with MGF, formerly known as Mast Global Fashions, under the terms of a $150 million loan deal with Sycamore. In court papers, Aéropostale said that Sycamore essentially directed MGF to tighten Aéropostale’s payment terms to force it into bankruptcy. Read more. (Subscription required.)
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