Shoe & Shirt, the Austrian company that bought GBB in November 2003, has requested a form of Chapter 11 bankruptcy for this French children’s footwear company. At the same time, it has launched a lawsuit against GBB’s former owner and chairman, Georges Biotteau, alleging mismanagement and defaults that are leading the company to sustain unexpected fiscal charges, aggravating its financial situation.
The procedure will freeze GBB’s payments to suppliers, the banks and other entities for a while – probably between three and six months – until a court-appointed receiver presents a viable financial recovery plan. The procedure is expected to speed up the legal proceedings as well as the previously reported plan to lay off 99 of the company’s 148 remaining employees, including most of its factory workers (see previous issue). Last April, GBB had already laid off 107 people.
In a public statement, GBB said the procedure will ensure that the company will have enough finances to reschedule its debt and to pay off the workers who will be laid off. It said that any compensation obtained through the legal proceedings will be reinvested in the company to consolidate its future development.
Little could be learnt about the nature of the charges made against Biotteau, who took a long time to find a buyer for his company. It seems that the facts go back to three of four years ago. GBB says the new court action is related to two complaints already filed in December 2004 against Patrick Katarzynski, former financial director of GBB, charging financial manipulations and abuse of company funds.