A California-based luxury brand now files an unexpected bankruptcy after listing $500k to $1 million in assets and up to $10 million in liabilities
On August 21st, luxury fashion retailer McMullen filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Northern District of California.
The filing reportedly comes amid a lawsuit filed by online competitor Moda Operandi, alleging copyright infringement.
In its bankruptcy petition, the Oakland, California-based debtor listed assets in the range of $500,000 to $1 million, and liabilities between $1 million and $10 million.
The company indicated that funds will be available for distribution to unsecured creditors.
The debtor filed its bankruptcy petition approximately two weeks after luxury fashion retailer Moda Operandi filed a lawsuit against McMullen in the U.S. District Court for the Northern District of California.
The lawsuit alleges that McMullen engaged in copyright infringement by using Moda Operandi’s copyrighted product photos without the retailer’s consent.
According to Sourcing Journal, the luxury apparel retailer Moda Operandi, based in Brooklyn, New York, filed its complaint on August 7.
The complaint alleges that McMullen “committed copyright infringement with actual or constructive knowledge of, or with reckless disregard or willful blindness for (Moda Operandi’s) rights in the (photos), such that said acts of copyright infringement were willful.”
In its complaint, the plaintiff (Moda Operandi) included 19 of its copyrighted images featuring various fashion items such as skirts, dresses, tops, pants, sweaters, and jackets.
These images were placed alongside screenshots that the plaintiff alleges were taken from McMullen’s website. Moda Operandi believes the images used by McMullen were either identical or highly similar to its own copyrighted images.
Moda Operandi is seeking damages, the amount of which is to be determined at trial.
Additionally, the plaintiff has requested an injunction to prevent McMullen from using the 19 images without obtaining permission from Moda Operandi.
With McMullen’s Chapter 11 bankruptcy filing, all litigation against the company is now subject to an automatic stay while the bankruptcy case progresses.
According to its website, McMullen was founded in 2007 by Sherri McMullen and has received praise from prominent fashion publications such as Vogue, Women’s Wear Daily, and Harper’s Bazaar.
The retailer offers women’s luxury apparel from highly regarded brands including Christopher John Rogers, Dries Van Noten, The Row, Aisling Camps, and Diotima.
Additionally, it features a line of luxury menswear from Dries Van Noten.
Alongside its flagship store in Oakland, McMullen opened a second boutique location on August 12th in the Presidio Heights neighborhood of San Francisco.
The fashion retailer also operates an e-commerce platform through its website.
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Also Read: Another Mall Clothing Retailer Now At High Risk of Bankruptcy
Other Economy News Today
A massive rental company with 34k locations now shuts down its operations after filing for bankruptcy and 22 years in business.
Users of movie rental company Redbox were left saddened after it was announced that it would be shutting down operations.
The announcement comes after the rental company’s parent company, Chicken Soup for the Soul Entertainment, filed for Chapter 11 bankruptcy.
According to court documents obtained by the Washington Post, the Connecticut-based company claimed to be one billion dollars in debt.
As a result, Redbox, which was a staple of many grocery stores including Walgreens, and CVS will be shuttered.
Many fans took to social media to express how upset they were with the loss.
“I knew it was coming, sadly,” UltraVada wrote in a post on X, formerly Twitter.
“It was inevitable,” a second person mourned.
“I knew this would happen when I heard they filed for Bankruptcy but its still sad to hear. I have a lot of fun memories of Redbox,” a third person lamented.
“I still don’t think this will be or ever be the end of physical media as we do still get remasters of some movies in 4k/Bluray.”
One person revealed that they had forgotten the rental service had existed.
Some users were not surprised by the announcement.
“Not surprised since nobody really rents videos anymore with the rise of streaming and what not,” one user admitted.
“Also kinda remember getting into a feud with them on here.”
One user also pointed out that the last remaining Blockbuster, located in Bend, Oregon, managed to outlive Redbox.
Redbox was acquired by Chicken Soup for the Soul Entertainment (CSSE) in 2022 and became one of the company’s flagship video-on-demand streaming services.
At its peak, CSSE operated more than 20,000 DVD rental kiosks across the country.
The company’s filing means that the company’s more than 1,000 employees will be laid off, per The Wall Street Journal.
It was also reported by Deadline that many employees at CSSE hadn’t received their paychecks and had medical benefits cut in late June.
Also Read: This Massive Mall Retailer Is Now Closing In California
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