Three weeks after London Luxury won a $101 million jury verdict against Walmart, three creditors have filed an involuntary petition in U.S. Bankruptcy Court, White Plains, forcing the New Rochelle business into Chapter 7 liquidation.
Creditors occasionally file involuntary bankruptcy petitions when they have clear-cut claims to collect and they see that a debtor has significant assets to go after.
The creditors in this case claim that London Luxury, founded in 2002 by London native Marc Jason to sell health and wellness products, owes them $6 million.
London Luxury sued Walmart in 2022 for allegedly backing out of a deal to buy $500 million in disposable nitrile gloves during the Covid-19 pandemic. On April 9, federal court jurors in Fayetteville, Arkansas ruled that Walmart had breached a contract and caused $101,218,680 in damages to London Luxury.
The May 3 involuntary bankruptcy petition was brought by Bristol Associates Ltd., Scarsdale, claiming a $3.8 million debt; Nanobionic Technologies Ltd., of Nicosia, Cyprus and Manhattan, for $1.9 million; and Y&S Sales Group LLC, Brooklyn, for $285,000.
Bristol Associates, a textile importer, accused London Luxury last year of breach of contract for allegedly failing to pay for goods. London Luxury broadly denied the allegations in a formal answer to the lawsuit. On April 25, Westchester Supreme Court Justice Gretchen Walsh issued a trial readiness order and set the schedule for pre-trial proceedings.
Nanobionic Tech sued in 2022 for alleged failure to pay royalties on a trademark and technology deal. A Manhattan Supreme Court judge issued a default judgment in March 2023 for $1,875,000 against London Luxury for failure to answer the charges.
Y&S Sales accused London Luxury and founder Marc Jason of breaching an agreement to deliver nitrile gloves in 2020. Judicial Arbitration and Mediation Services ruled for Y&S in 2022, and last year Nassau Supreme Court confirmed the arbitration award and issued a judgment against London Luxury and Jason.
A company that did not participate in filing the involuntary bankruptcy petition is poised to join the case. Two lawyers filed notices to appear on behalf of Precious Packaging Inc., of Manhattan.
Precious Packaging sued London Luxury and Performance Sourcing Group, Hartsdale in 2022 for allegedly failing to pay for packing materials, throw bags, tote bags and face coverings. Both businesses failed to defend themselves and a Manhattan Supreme Court judge awarded $565,788 to Precious Packaging on April 2.
Update: On Oct. 7, 2024, U.S. Bankruptcy Judge Sean H. Lane granted a joint motion by London Luxury, Bristol Associates and Y&S Sale Group to dismiss the case. London Luxury argued, in part, that continuation of the bankruptcy case would hinder its ability to collect the Walmart judgment and pay creditors.
