New York-based Rubie’s Costume Company has filed a voluntary petition under Chapter 11 of the US Bankruptcy Code in New York.
The Beige family-owned company has sought to facilitate financial restructuring under Chapter 11 – a form of bankruptcy that involves a reorganisation of a debtor’s business affairs, debts, and assets.
Companies generally file for Chapter 11 bankruptcy if they are looking for time to restructure their debts, as it allows debtors to have a fresh start. The filing relates specifically to the USA business and some of its affiliates and does not include the UK or European arms of the company.
As the world’s largest designer, manufacturer and distributor of costumes, with offices around the globe, Rubie’s is a family-owned and operated business that has been in operation for some seven decades. It is also a major player in licensing, with major partnerships including Disney, Marvel, Lucasfilm, Warner Bros. and Nickelodeon.
“Given the highly seasonal nature of our business, our manufacturing relationships in China, the chilling impact of the COVID-19 pandemic on the US and the global economy and potential liquidity pressures, the Board of Directors determined that the Chapter 11 filing is our best path forward as we carry out our restructuring efforts,” said Rubie’s president Marc Beige. “We believe that this decision will best serve our customers, licensors, employees and business partners.”
Rubie’s recently reduced its US workforce as its East and West Coast operations were deemed non-essential on March 26. The company has turned its manufacturing facilities over to producing urgent goods including hand sanitiser and personal protective equipment (PPE) to be used in the ongoing fight against the COVID-19 pandemic.
The company plans to ‘use cash collateral’ and is currently looking to place a new financing facility that will: “provide for the continuation of its operations, including payments to vendors, employees, customers, and creditors.”
It has filed customary first-day motions with the Bankruptcy Court to support operations during the court-supervised process, including motions requesting authority to pay prepetition employee wages and benefits and to continue customer and licensor engagements.
The New York filing can be found under case number 20-71970.
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