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Bankruptcy Filing Trends and American Apparel: David Kupetz Quoted in Series of Daily Journal Articles
David Kupetz was featured in a series of articles in Daily Journal providing comments on multiple issues in bankruptcy, including the American Apparel bankruptcy case. As discussed in the article “American Apparel Founder’s Suits to Outlast Company,” lawsuits filed against American Apparel by ousted CEO Dov Charney seeking recovery from insurance coverage will last longer than American Apparel itself.
American Apparel’s employment practices liability insurance carrier may be forced to defend against Charney’s claims well after the company has folded for good. Mr. Kupetz commented that while “it is uncommon for claims to continue after a Chapter 11 plan,” courts may allow claims to continue to pursued when recovery is limited to insurance.
As American Apparel has sold its remaining assets and will imminently shut down its surviving stores, it remains to be seen how much, if anything, Charney will be able to recover for his 16 pending lawsuits against the company.
In another article, “Long Trend Seen in Bankruptcy Filings Downturn,” Mr. Kupetz weighed in on the reasons behind the decrease in bankruptcy filings in 2016, explaining that factors include the availability of financing through private equity firms and other sources, as well as the prevalence of alternative out-of-court restructuring arrangements.
“There’s a lot of liquidity and a lot of funding sources, as well as non-conventional sources of both equity and debt,” Mr. Kupetz said.