The company that owns Jessica Simpson's billion-dollar clothing brand has filed for bankruptcy, claiming it is more than $400 million in debt.
Sequential Brands has filed Chapter 11 bankruptcy in Delaware Federal court this week, revealing their “significant debt” stands at a whopping $435 million.
In documents obtained by KNEWZ, the company claims it has secured $150 million in financing that will help pay back some of the debt while they continue to attempt to sell their brands.
Besides Simpson's lucrative clothing company, Sequential Brands also owns the popular denim company Joe’s Jeans, well-liked activewear brands including Gaiam, AND 1, Avia, SPRI, and lifestyle brand William Rast.
Simpson's not the only celebrity that Sequential Brands had under their belt either.
The company also owned Martha Stewart's lifestyle empire, as well as Emeril Lagasse's cooking brand. It sold both brands in 2019.
According to reports, Sequential Brands is quickly tanking in stocks following the Chapter 11 filing.
After the damaging move, the company's stock reportedly fell 60 percent.
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“The Company determined that, as a result of the significant debt on its corporate balance sheet, it was no longer able to operate its portfolio of brands,” the bankruptcy documents state.
Simpson reportedly wanted to buy her company from Sequential Brands before the bankruptcy filing but failed to produce the funds.
This isn't the only time The Jessica Simpson Collection has been in the news.
Back in 2016, a man named Jeffrey Bowler sued Simpson, her father, Joe Simpson, her mother, Tina, and her younger sister, Ashlee, over the sale of the fashion designer's company.
Bowler claimed he was screwed out of $12 million after Joe allegedly made a verbal deal with him to purchase the company over the phone.
Jessica ended up filing her own documents, demanding the court throw out Bowler's multi-million lawsuit.
In the end, the two reached a settlement over their years-long court battle.