Nygard Group of Companies is financially restructuring its business to avoid bankruptcy, a company spokesperson said, as fashion mogul Peter Nygard faces several sexual assault allegations in New York.
Two weeks ago, the company announced Nygard was stepping down from the company and would divest his ownership stakes. Then on Tuesday morning, Nygard company filed a notice of intention (NOI) to file a proposal under the Canadian Bankruptcy and Insolvency Act, a spokesperson said in a statement sent to media.
This does not mean the company is going bankrupt, but that the company is seeking protection while it restructures its finances.
Given the lawsuits, “damage was certain to occur,” the spokesperson said.
Those damages include losing a top customer and one of the company’s financial lenders seeking immediate payment, the spokesperson said.
“The company will be working with several professional advisors during the process, including a trustee who will assist with the development of a restructuring plan, and in general, oversee the NOI process as a whole,” the spokesperson said.
The spokesperson twice stressed in the statement that it’s “business as usual” at the company and its stores while the financial restructuring takes place.
On top of being accused of rape in a class-action civil lawsuit, police in the Bahamas are investigating allegations made by four woman — who are part of the class-action — regarding an alleged “sex trafficking ring.”
FBI investigators have raided Nygard’s offices in New York, but did not confirm that it was related to the allegations.
Nygard also faces legal action from Sitrick and Co., a Los Angeles-based public relations firm.
In October 2018, a California arbitrator ordered Nygard to pay what’s owed to the Los Angeles firm for work it did, plus interest and legal fees.
Nygard did not pay, so in July, Sitrick took the matter to the Manitoba Court of Queen’s Bench, which ordered Nygard to pay roughly $1.6 million.
No criminal charges have been proven in court.