The High Court has wound up an insolvent Irish company selling and promoting men and women’s clothing under the American Eagle and Aerie fashion brands in Europe.
AEOEU Ltd, with registered offices in Dundrum Business Park, Dublin, was set up under a licence agreement in January 2019, to commercialise the brands in certain countries in Europe through wholesale, retail and ecommerce platforms and with the right to appoint sub-licencees.
It opened five American Eagle stores in Ireland, Switzerland and the Czech Republic and contracted with more than 15 wholesale partners to sell the products.
Its retail subsidiary here is AEO Retail Ireland Ltd which operates two Irish stores in the Jervis Street Shopping Centre, Dublin, and in the Whitewater Shopping Centre in Newbridge, Co Kildare.
The licence agreement was with American Eagle Outfitters Incorporated (AEO) subsidiaries, Retail Royalty Company of Las Vegas, Nevada, and AEO Management Co, Pittsburgh, Pennsylvania.
In an application seeking winding up, AEOEU said it grew through its various platforms until 2021 despite the effects of the pandemic. However, it was unable to fulfil an obligation to open the number of new stores across Europe which it was required to do under the agreement.
The debt to the AEO in America grew and, by September 2021, it stood at $7.7 million (€6.98 million).
Despite talks to try to resolve matters, a notice of termination of the agreement was served on January 10th last, AEOEU said.
AEOEU has liabilities of €10.8 million and current assets of about €12.8 million. While it holds some €8 million in AEO stock, it said the ending of the licence prevented it from realising the value of that stock, it said.
It has €1.67 million cash at bank but it does not have “meaningful realisable assets in order to meet its significant liabilities”.
Provisional
In January, the High Court granted an AEOEU application to appoint joint provisional liquidators.
However, the American (AEO) companies, which were AEOEU’s largest creditor, sought the removal of the provisional liquidators and the appointment of an examiner instead.
The American companies said this would preserve the Irish companies’ business to ensure they remained capable of being saved under certain conditions. They also said the Irish companies had failed to provide AEO with books and records it had requested before the agreement was terminated.
On Thursday, Kelley Smith SC, for AEOEU, asked Mr Justice Denis McDonald to make a formal winding up order.
The judge said he was satisfied to do so and appointed James Anderson and Ken Fennell of Deloitte Ireland as joint liquidators. He ordered that a statement of affairs on behalf of the directors, Nishith Soneji of Hertfordshire, UK, and Sunil Shah, of Airfield Park, Donnybrook, Dublin, be delivered within 21 days.
