Uniform chain pays $325K in collapse
SAN ANTONIO — The trustee overseeing the bankruptcy of Parker School Uniforms has reached a settlement of litigation against four former executives over the company’s 2018 collapse.
Creditors of the chain, which operated 47 retail stores in Houston, San Antonio and other cities, won’t see a big windfall, however.
Chapter 7 trustee Jeoffrey Burtch last month asked a Delaware bankruptcy judge to approve a $325,000 settlement with former Parker CEO Troy Pike and CFO Don Van der Wiel of Houston, vice president of sales Amy Allison Balthrope of San Antonio, and vice president of merchandising Susen Sarpa of California.
Lawyers who represented Burtch in the five lawsuits, including one filed in state District Court in San Antonio, stand to receive 40 percent of the settlement, or $130,000.
The rest, minus any other fees or costs, will go to Parker’s creditors.
The Houston-based company unexpectedly shut down in early 2018 after 87 years in business. Parker was a major provider of school uniforms to private and charters schools in Texas and other Sunbelt states. Its collapse cost
320 employees in Texas their jobs.
Burtch had sued the four former executives on behalf of the bankruptcy estate.
In his San Antonio lawsuit, Burtch called Parker’s management a “disaster.” He accused Pike, Van der Wiel and Balthrope of putting their own interests ahead of the company’s, leading to its bankruptcy liquidation.
Parker School Uniforms was “torn between factions,” and the relationship between Pike and Van der Wiel “deteriorated to the point where each was pushing their own agenda at the expense” of the company, the suit said.
“The toxic atmosphere resulted in numerous grossly negligent decisions that combined to cause the swift downfall of PSU,” Burtch alleged.
Replacing Parker’s supplychain management system on the eve of the 2017 selling season was perhaps the most egregious of all the negligent moves made by management, he said. The new system was “an abject failure” because the company couldn’t supply customers in a timely manner.
Burtch also criticized management’s decision to pursue a brickand-mortar business model at a time when the industry was moving to a online platforms. Management “pushed massive growth” when the company did not have the means to support it, the suit said.
In addition, the complaint said, a substantial portion of the company’s inventory was “obsolete” but was kept on the books for far in excess of its real value.
A trial in the San Antonio case was scheduled to start next week, a court filing says. Pike, Van der Wiel and Balthrope are the defendants in the action. Two Parker directors were named in the suit but were later dropped from the case.
Burtch also sued the ex-officers individually in bankruptcy court to recover payments that he deemed “fraudulent transfers” of company assets.
A court filing shows the amount each allegedly received: Pike, $277,902; Van der Wiel, $251,777; Balthrope, $124,700; and Sarpa, $170,557.
Burtch settled the five lawsuits, even though he said he believed he would prevail at trial. The defendants “asserted that they met their professional obligations and the applicable standard of care, did not breach their duties, and did not … cause any damages,” Burtch said in the filing. They also had legal defenses regarding the allegedly improper payments.
Those defenses “may have merit,” Burtch said in explaining why he agreed to settle the cases.
Matthew Walker, a Houston lawyer for the four defendants, had no comment Friday. A bankruptcy court hearing to approve the settlement agreement is set for April 14.
The retailer listed about $21.7 million in assets and $31.6 million in debts at the time of its bankruptcy filing.