Bibhu Mohapatra this week filed for Chapter 11 bankruptcy protection citing liabilities of up to $1 million in debt. The New York City-based designer told the Wall Street Journal that he plans to continue operations and he feels the debt restructuring will make his company more attractive to investors. Mohapatra also said the restructuring will allow him to start a more affordable second collection.
Mohapatra founded his namesake label after working for J. Mendel. His designs have been worn by the likes of Michelle Obama, Gwyneth Paltrow, Lupita Nyong’o and Glenn Close, and he was one of the finalists for the 2014 International Woolmark Prize.
The past two years have been a tumultuous time for fashion designers, brands, and retailers, alike, resulting in many bankruptcies and closures. Retailers American Apparel, Karmaloop, Sports Authority, PacSun, Aeropostale, The Limited, and Nasty Gal all filed for bankruptcy in the past two years for debt restructuring or to seek potential buyers. Tamara Mellon, Quiksilver and Yogasmoga also filed for bankruptcy protection.