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Chapter 11 in the UK

posted by Stephen Lubben

So Business of Fashion points to a story on the Independent's web page, wherein a fashion designer calls for the adoption of something like chapter 11 in the UK. While chapter 11 debtor advocates are few and far between in the US, the motivation in this case comes from the designer having lost control of his business when his lender took control and sold the operation to a private equity fund.

My knowledge of British fashion pretty much starts and ends with Turnbull & Asser, so click on the links above if you want the juicy details.

My question is whether chapter 11 would have achieved what the designer thinks it would have.  I have doubts.

Namely, because chapter 11 as practiced today is so heavily controlled by senior lenders, I'm not sure he would have had too much more time to get his house in order here in the U.S. either. You basically have to work with the senior lender – who often becomes the DIP lender – or else. And the story suggests an inability to do that.

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