Gotcha Emerges From Bankruptcy…

July 16, 2003
SGB Update

Gotcha is emerging from Chapter 11 bankruptcy after filing for protection last August. The company currently owes creditors about $8.0 million, but plans to pay it off with 6-8% interest within 44 months.

Gotcha, which was founded in 1978, made its name as an authentic surf-wear company with good distribution to specialty retailers. Today the company’s Gotcha, More Core Division and GirlStar brands are licensed to other manufacturers and reportedly sold through mid-market department stores such as Kohl’s and Sears, as well as Gart and The Sports Authority.

“Were very excited about emerging from bankruptcy. We feel that weve moved very quickly in these proceedings”, said company President Donald Grier.

The fact that Gotcha is paying off 100% of its debt with interest is a good sign according to their lawyer, Evan Smiley. “Gotcha–they were able to use the bankruptcy process to turn the company around to where theyre producing substantial cash flow right now. It’s not common these days to see a plan of reorganization from a Chapter 11 debt that pays 100% to its creditors.”

“Gotcha was at one point a very authentic surf brand, about 15 years or so ago,” said apparel analyst Mitch Kummetz of D.A. Davidson & Co, in a published report.

“GirlStar and More Core Division were once strong brands”, continued Kummetz, also suggesting that the company lost a lot of its distribution. “I think that would be kind of challenging for them to sort of win back that distribution.”


>>> It’s like, you know, cool they came out of BK so fast, but dude it’s sort of, you know…

Gotcha Emerges from Bankruptcy

July 9, 2003
SGB Update

Gotcha International LP announced Tuesday that it is emerging from bankruptcy. The company, which filed for Chapter 11 reorganization in August, will pay its creditors fully with 6-8 percent interest. Gotcha owes about $8.0 million, which should be paid off within 44 months, said Evan Smiley, Gotcha’s attorney.

The transition affects the six employees in Gotcha’s corporate headquarters as well as the hundreds of people who work for its licensees and partners around the world.

Gotcha, which used to manufacture surf apparel, now licenses its brands–Gotcha, More Core Division and GirlStar–to three or four domestic partners and 23 licensees internationally, Smiley said.

“Were very excited about emerging from bankruptcy,” Gotcha President Donald Grier said.

“We feel that weve moved very quickly in these proceedings.”

Gotcha products used to be sold to department stores and specialty surf retailers, Grier said. But since declaring bankruptcy, the company has changed its target distribution to mid-tier department stores such as Kohl’s, Mervyn’s and Sears and sporting-goods stores such as Gart Sports, Sport Mart and The Sports Authority.

“Gotcha was at one point a very authentic surf brand, about 15 years or so ago,” said apparel analyst Mitch Kummetz of D.A. Davidson & Co, adding that it has since been aimed at a mass market.

GirlStar and More Core Division were once strong brands, Kummetz said.

“It’s lost a lot of its distribution,” Kummetz said.

“I think that would be kind of challenging for them to sort of win back that distribution.”

Company officials at Gotcha were partners in a failed venture to erect The Gotcha Glacier, a $150-million indoor action-sports facility in Anaheim that officially folded in December.

But the company could be making its way back into the black.

“It’s not common these days to see a plan of reorganization from a Chapter 11 debt that pays 100 percent to its creditors,” said Smiley, a partner at Albert, Wieland & Golden in Costa Mesa.

“Gotcha–they were able to use the bankruptcy process to turn the company around to where theyre producing substantial cash flow right now,” he said.

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