StyleSite Marketing Inc., Teaneck, NJ, parent company of Lew Magram catalog and Brownstone Holdings Inc., which sells women’s clothing through its catalog Brownstone Studios, filed for Chapter 11 bankruptcy protection Thursday in United States Bankruptcy Court for the Southern District of New York.
Assets and liabilities each were listed at an estimated $35 to $38 million, according to Neil Siegel, an attorney representing StyleSite, who said those numbers were subject to change and were based on reports from September.
Staffing at the companies has been reduced due to financial considerations but immediate plans are underway to increase the staff and acquire funding for the reorganization, Siegel said.
“We are optimistic that we will obtain funding that is necessary in order to continue operations and we’re working very hard on that,” Siegel added.
The company filed after its senior bank lender chose not to provide further funding, Siegel said.
Pam Pembroke, a Mountpelier, VT, consumer had been unsuccessful in attempting for “three days steady” to reach Lew Magram after two orders, to be shipped Dec. 30 and Jan. 11, had not arrived as of Friday.
Pembroke said she had tried to reach the company via its customer service line, fax and letter and was troubled by the lack of response.
In addition to the bankruptcy filing, Brownstone Holdings was also in court Thursday at a hearing before the New Jersey Division of Consumer Affairs answering consumer fraud charges that had been filed last month, according to The Record in Hackensack, NJ.
An attorney representing Brownstone in the fraud case told The Record that Brownstone was “effectively out of business,” and that the firm has “no money and no employees.”
The charges include making false promises to customers about delivery times, shipping orders late or not delivered at all, and failing to make refunds as promised.
The suit seeks unspecified consumer refunds and civil penalties of 47,600 for each alleged violation, resulting from 546 complaints.
Lew Magram Ltd had acquired the assets of Brownstone Studios Inc., after the latter filed for bankruptcy protection in 1997. Brownstone Holdings is a wholly owned subsidiary of StyleSite Marketing.
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