In 2020 he told The New York Times that none of the sale and investment discussions “matched the needs we saw.” The TAL lawsuit, which also names the Del Vecchio family’s holding company, Delfin, as a defendant, claims that none of the discussions were shared with the board or the shareholders. Like many global apparel suppliers, TAL, which owns 11 factories and employs over 26,000 people, according to the lawsuit, was hard-hit by the volatility caused by the onset of the pandemic. At one point, the slump in demand from retailers saw garment production fall to just 30 percent of group capacity, prompting the permanent closure of several factories and a shift toward manufacturing personal protective equipment.
In August 2020, after the forced store closures of lockdown wreaked havoc on their balance sheet, Brooks Brothers was sold for $325 million to SPARC group, a joint venture between Simon Property Group, the biggest mall operator in the United States, and Authentic Brands Group, a licensing firm. TAL is also an unsecured creditor in the bankruptcy litigation.
Paul Lockwood of Skadden, Arps, Slate, Meagher & Flom, a lawyer for Claudio Del Vecchio, said, “The allegations in the complaint are false and we expect the court to dismiss the case.” Katie Jakola of Kirkland & Ellis, the law firm representing TAL, said they were looking forward to their day in court.
Some observers doubt it will come to that, however.
“This seems like two rich parties airing grievances,” said William Susman, managing director at Threadstone Advisors. “Brooks Brothers’ owners have taken their pain already. TAL is a large, sophisticated company. Hard to feel they were swindled. Sounds like a settlement is in everyone’s future.”
Elizabeth Paton contributed reporting.