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Brooks Brothers' former owners accused of driving company into bankruptcy to avoid losing millions
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The billionaires who formerly owned Brooks Brothers' are being accused of pushing the over 200-year-old retailer into bankruptcy to escape losing millions in selling it off to an investor.
The suit, filed on behalf of its longtime supplier TAL Apparel and Castle Apparel Limited, claims that its former Chief Executive Claudio Del Vecchio and his son Matteo Del Vecchio, who was the company’s former chief administrative officer, "breached their obligations and abused their position of power at Brooks Brothers" by putting their "own financial interests ahead of those of the Company."
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In 2016, the Del Vecchios, who gained control of the company in 2001, approached TAL to invest $100 million into Brooks Brothers under an agreement that the family-run garment manufacturing company would be "made whole" of their investment if the company was ever sold off for less than $652 million.
This investment – however – is "now nearly worthless" now that the company had declined any sale and instead sought protection in bankruptcy court, the suit claims.