2007
Investors File Suit Against J Brand-You must have your papers in order!
Posted by: Fashion06 in Fashion News, Financing |
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If you’re not familiar with J Brand…like me, then let me tell you a little about them. It is a women’s line of blue jeans who?supposedly pioneered the skinny-leg?jean concept.?
Now J?Brand is being sued by it’s own Private Investors?Colin Dyne and Todd Kay?who loaned the popular?jeans line $130,000 two years ago?and is now taking them to court with the intentions of taking 40% ownership of the company. Dyne and Kay head a private investment firm named Forte Venture Partners, which loaned J brand the $130,000 at 5 percent interest to be repaid by June 2005.
Even with the initial success of the J brand, which appeared in numerous fashion magazines from their early?debut in Ron Herman’s to wide spread press?coverage. They never repaid the loan and the agreement was that if the loan was still unpaid by said date that Colin and Todd could convert the loan into a 40% equity ownership in the company.
I’m not taking sides, because from the looks of it this could actually be?a fault on the side of the clothing company J Brand, but these are some reasons for my article on Beware of the investor.
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June 14th, 2007 at 10:29 am
Dame I hope this is not true because 40% equity ownership in the company is a lot.
June 14th, 2007 at 10:47 am
I know especially when you add in the fact that they could have just paid back $130,000 now the investors are going to be eating at their profits for the rest of the companies life!
June 14th, 2007 at 11:30 am
Good point. If that’s the case I might be looking to sell the company and use that money to 100% finance a new company.
June 15th, 2007 at 12:30 pm
That is what is going to happen in most likelihood. It goes on all the time. A deal is a deal, but since these guys didn’t honor theirs from the get go, what angel investor ( now 40% owners) is going to trust them ?
Not a good start for anyone unless these guys CAN work with this new set up. I doubt it though.
Maybe one reason why securing investors for any apparel business is so difficult . These jokers just made it harder for new upstarts to find any investors if they walk away from this comapny.
Fred, you should follow this . It may make good case study that someone can learn from. Where do you dig this stuff up anyway?
June 15th, 2007 at 12:51 pm
From you guys!…readers send me emails for stuff to post and they usually leave links. I don’t post links to every story if I have written a story from the site before because it is usually linked to multiple times throughout the blog…but I think this particular story is from DNR
July 31st, 2007 at 7:23 pm
If the J Brand loses the suit and they decide to sell the business, they will still be obligated to pay the investors 40% of the earnings.
Personally, I’d rather put up and mess up my own money than to mess up someone elses.
Chris
loveadamas.com