Forever 21 Creditors Challenge Bankruptcy Amid Dispute Over Intellectual Property Transfer
Apr/18/2025
A committee representing unsecured creditors of fast-fashion retailer Forever 21 has challenged the company's latest Chapter 11 bankruptcy plan, citing troubling transfers of critical intellectual property assets. The committee specifically points to the shift of Forever 21’s intellectual property to a subsidiary of Authentic Brands Group, affiliated with Forever 21’s majority stakeholders, prior to the bankruptcy filing. Although details of the transaction remain undisclosed, F21 OpCo co-chief restructuring officer Stephen Coulombe acknowledged that the loss of valuable IP severely jeopardizes Forever 21’s ability to operate sustainably. Authentic Brands confirmed complete ownership of the Forever 21 IP, previously co-owned with mall REITs Simon Property Group and Brookfield, through their joint venture Sparc Group, which initially acquired the brand's trademarks and licenses in the retailer’s earlier 2020 bankruptcy. Sparc later merged into Catalyst Brands, which also manages prominent names like Aéropostale, Brooks Brothers, Eddie Bauer, Lucky Brand, and Nautica. This bankruptcy proceeding occurs amid financial turbulence at Catalyst, characterized by multiple rounds of layoffs and ongoing strategic uncertainty surrounding Forever 21’s future.
