WWD.com/fashion-news/fashion-scoops/mexx-mix-up-7075880
fashion-scoops
fashion-scoops

Fifth & Pacific Settles Gores Complaint

Fifth & Pacific Cos. Inc. and two of its foreign subsidiaries paid Gores Malibu Holdings and Mexx Europe International $22 million to settle all claims.

MEXX MIX-UP: Fifth & Pacific Cos. Inc. and two of its foreign subsidiaries have settled with Gores Malibu Holdings and Mexx Europe International BV, whereby Fifth & Pacific paid them $22 million to settle all claims arising from a complaint filed by Gores last Jan. 25 in which Gores claimed $25 million in damages arising from alleged breaches of the merger agreement related to the sale of the company’s global Mexx business.

Gores, a Los Angeles private equity firm, acquired an 81.75 percent majority stake in Mexx International for about $85 million from Liz Claiborne Inc., now known as Fifth & Pacific, in November 2011. Claiborne retained an 18.25 percent stake in the business.

According to a filing Friday with the Securities and Exchange Commission, the complaint included breaches of tax and tax-related covenants, breaches of interim operating covenants, breaches of reimbursement obligations related to employee bonuses and working capital adjustments. The complaint also included demand for payment of previously disclosed dispute resolution proceedings that were required to be made under the merger agreement, which concluded that Fifth & Pacific owed about $5 million to Gores. In connection with that settlement, Fifth and Pacific also sold its noncontrolling interest in Mexx Lifestyle BV to Gores for $4 million.