Betsey Johnson Sues Over Fabric Sales

Law360, New York (July 24, 2012, 3:36 PM EDT) -- Bankrupt clothing chain Betsey Johnson LLC on Monday launched a suit in New York federal court claiming a Manhattan fabric company improperly sold $300,000 worth of its material to third parties and refused to turn over the proceeds.

Betsey Johnson, which filed for Chapter 11 bankruptcy in April, said in an adversary complaint that H&S Fashion had recently sold the fabric — some of which bore Betsey Johnson labels — in violation of a court-ordered automatic stay. H&S wrongly sought to use the funds to offset...
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