Posts Tagged ‘bankruptcy’

QVC Vendor Mally Roncal’s Makeup Business Lands In Chapter 7 Bankruptcy

May 18, 2015

We know that home shopping fans don’s want to believe it, and neither do we, but makeup-artist-to-the-stars Mally Roncal’s namesake cosmetics company is in trouble. It has filed for involuntary bankruptcy.

We swear by Roncal’s mascara, which is a staple on QVC, so we’re a little shaken. And we love her bubbly personality. Yet we learned about her woes Sunday after a smart cookie posted the news on QVC Addicts on Facebook.

Mally Roncal in happier times

Mally Roncal in happier times

https://business-bankruptcies.com/cases/mallygirl-llc

Then we looked up the court papers in Maryland’s bankruptcy court, and there are reams of them online. It would take forever to read through all of them, but here is what we gleaned from the docket as best we can explain it.

Mallygirl LLC, which is based Towson, Md., was forced to file for Chapter 7 by its creditors, which include Brownie Mae Co. of Newark, on April 20.

In the filings, the creditors claim that the cosmetics company was set to sell all its assets for $7 million to Beauty Visions LLC, whose business address is Loeb & Loeb in Manhattan. The creditors allege that the proposed price is well below the value of those assets, which it puts at $18 million.

Those assets include merchandise consigned to QVC and held at its warehouses across the nation.

Most of the $7 million was slated to be paid to Mally’s secured lender Essex Bank, with no funds left to pay any of the company’s other creditors, which obviously didn’t sit well with those creditors. That’s why they went to court. Mallygirl had defaulted on a loan to the bank.

To stop the proposed sale and get an assessment of what was fair to creditors, they requested that a Chapter 7 trustee be appointed.

According to court papers, Mallygirl started looking for a buyer back in August 2014 when its business went sour.

“Mallygirl’s sales have weakened in recent years,” a court filing by the company’s creditors says.

“These shortfalls left Mallygirl both unable to make timely debt-service payments to Essex Bank and to meet obligations of its unsecured suppliers. Prior to the petition date, Mallygirl was subject to formal and informal forbearance agreements with a number of its suppliers. Prior to the petition date, the debtor considered various options in addressing its weakening financial performance, including efforts to obtain additional equity infusions.”

Roncal is mentioned in court documents.

“The value of the debtor (Mallygirl) and is assets is to a great degree based on the talents and services of Ms. Roncal,” papers said. “Ms. Roncal is both the face of the company and the brand, but is also the company’s chief sales’ person through her regular appearances on QVC.”

The pending sale was contingent on Roncal signing an employment agreement “to continue her
role as the face of the brand.”

Delaying a sale will decrease the value of Mallygirl’s assets, creditors claim, and they want bidding on the company.

“The urgent need to expedite the sale process cannot be understated,” they said in court papers. “The debtor’s cash will be depleted to almost zero in about five weeks, because QVC, a major
client of the debtor, has ceased paying the debtor on its accounts receivable.”

“Moreover, the inventory has a limited shelf life and is diminishing in value daily, and would be nearly worthless if operations cannot be funded or the sale does not close.”

Mallygirl has sought to have the case converted to a Chapter 11 bankruptcy proceeding.

The list of 20 largest unsecured creditors includes QVC Royalty of Wayne, Penn., which is owed $118,000 and Topline Products Co., of Wayne, N.J., which is seeking $2.74 million.

‘Housewife Of New Jersey’ Teresa Giudice And Her Husband, In Bankruptcy, Owe $11 Million To Creditors, New York Post Reports

June 6, 2010

Big spender Teresa Giudice, her husband Joe and their daughters at the second season premiere party for New Jersey Housewives

We read this story yesterday, but we tried to resist blogging about it. But when our cousin Judy out in Washington State e-mailed it to us, we knew it was dish we had to spread.

On Saturday the New York Post did a great story, headlined “Deadbeat Reality: Spendaholic ‘Housewife’ of NJ’ Owes a Big-Hair-raising $11 M,” on table flipper Teresa Giudice.

Man, we thought we were shopaholics, but we have nothing on Giudice, a mainstay of Bravo’s “The Real Housewives of New Jersey.” She’s been buying up a storm ($20,000 on credit cards for Neiman Marcus, Bloomingdale’s and Nordstrom, no TJ Maxx for her), even though she and her husband Joe owe $11 million to creditors.

According to bankrupcty papers filed in Newark federal court that the Post dug up, a bank is looking to foreclose on the Giuduce’s $1.8 million mansion in Totowa, N.J.

The Post claims that banks have already seized the Giudice’s shore house.

Money is so tight, the Giudices have defaulted on their monthly $1,280 payments for their Escalade, according to the Post.

Giudice, a stage mom who has worked hard to get her small daughters modeling gigs, makes $3,333 a month for doing the Bravo reality show, according to court papers, the Post reported.

Although we see them living large on TV, in bankrupty filings Giudice, who just wrote a cookbook called “Skinny Italian,” and her husband claim they only spend $400 a month on clothes.

We met Giudice at a party for the premiere of the second season of “Real Housewives of New Jersey,” and she was pretty and sweet. So we hope she and her husband can get out from under their debt.

DirecTV’s Suit Against Gems TV: Who Claims What

April 8, 2010

Well, the love is sure gone between DirecTV and soon-to-be-shut-down Gems TV.

Gems TV made its U.S. debut on DirecTV in November 2006. At that time, DirecTV lauded the network.

“[GemsTV’s] innovative reverse-auction format is unprecedented in the history of American television and offers viewers a fun and easy way to shop for high-quality gemstone jewelry from the comfort of their own homes,” said DirecTV EVP of programming acquisitions Dan Fawcett, a straight-up guy who we know from our days covering cable.

But that was then, and now is now.

Before Gems TV, which is ceasing operations, filed for Chapter 11 bankruptcy protection on Monday, DirecTV had already been in court and won a restraining order barring the home shopping network from taking any action that would leave the channel with less than $25 million in money or assets, until further order of the court. Presumably, DirecTV believes it is owed that same $25 million.

DirecTV’s lawsuit has been stayed pending the bankruptcy proceeding, but we got a look at it. Large portions of the suit have been “redacted,” or blacked out. Those include the details of DirecTV’s carriage agreement with Gems TV. The suit charges Gems TV with breach of contract and fraudulent conveyance.

Basically DirecTV, which brought Gems TV to 18 million homes, was trying to stop the network from moving all its assets to the Cayman Islands — out of the reach of creditors.

In February, Gems TV came to DirecTV and asked to renegotiate their carriage deal, telling the satellite provider that it “was losing money and might be forced to discontinue their programming activity,” according to the suit.

DirecTV refused to amend or modify the contract. On March 8, Gems TV gave DirecTV written notice that it was terminating their contract because the network was in fact going black. The satellite company says that’s a breach of contract.

In one of the exhibits, a letter dated March 19 to DirecTV’s Toby Berlin, Gems TV president (and Charter Communications alum) Diane Schneiderjohn said that under their carriage deal, the pact can be terminated if the programmer “discontinues operation and distribution of the service.”

She writes that Gems TV will cease operations April 15, and therefore there is no breach of contract.

Around this time, DirecTV learned that Gems TV was planning to invest $60 million in Multimedia Commerce Group, which operates Jewelry Television. “Gems TV thus seeks to transfer its assets in a fashion that will leave no assets available to compensate DirecTV for damages caused by Gems TV’s breach of the contract,” according to the suit.

The transfer of assets to the Cayman Islands or to invest in JTV “is undertaken in bad faith and constitutes fraudulent transfer,” DirecTV alleges.

That investment was a way for Gems TV to liquidate the rest of its inventory, by taking it to JTV, according to DirecTV’s suit.

This may all be moot now, to be decided by a bankruptcy judge. In its Chapter 11 filing, Gems TV claims to have $51.2 million in assets and $120 million in debt, all unsecured.

While We Were In Atlantic City, Gems TV Filed For Chapter 11 Protection In Nearby Delaware

April 7, 2010

The Homeshoppingista took a little R&R Monday with an overnight trip down to Atlantic City with dad, sister Karen, brother-in-law Kent, niece Syndey and nephew Evan. The weather was gorgeous, but since we don’t have a laptop we had to take a siesta from the blog.

Now we’re trying to update you on the Gems TV story even though we’re straining our neck to turn around and peek at “Southland” on TNT. But blog duty calls.

It seems that while were were strolling along the AC boardwalk Monday, Gems TV was busy filing for Chapter 11 bankruptcy protection in Delaware. Gems TV posted a one-paragraph press release about the filing on its Web site Tuesday.

“Gems USA has, after due consideration, determined that the Chapter 11 proceedings is the best exit strategy to adopt to ensure an orderly winding down of its U.S. operations,” the release said.

After a tip from a reader, last week we broke the story about Gems TV planning to shut down operations and buy a stake in Jewelry Television. We also wrote that giant distributor DirecTV has filed suit and received a retraining order against the network over $25 million in revenue that the satellite provider apparently believes it is owed.

The Wall Street Journal wrote up the Gems TV bankruptcy Monday.

For cable insiders, Gems TV’s president is Diane Schneiderjohn, a former marketing executive at Charter Communications.

In the bankruptcy filing, according to The Journal, Gems TV is claiming it has $120 million in debt. The network, unlike other home shopping networks, makes its viewers bid for items via what it calls a reverse-auction format. Guess that has not gone so well, and soaring gold prices have also strained the network.

The bankrupty filing says that Gems TV has $51.2 million in asets, according to The Journal.

The networks employees will join the unemployment line, like us, May 6. Gems TV claims it has 37 million subscribers.