That’s the charge from former Maclaren nursery director, designer David Netto. Netto tells the Huffington Post:
“I gather [Maclaren North America] was invented to supplant Maclaren USA,” Netto told The Huffington Post. “It had everything to do with writing off the debt.”
Netto is referring to the bankruptcy of Maclaren’s former US distributor arm, dubbed Maclaren USA (aka, American Baby Products). According to press reports, Maclaren was pressured by several lawsuits from parents of injured toddlers after their 2009 recall of strollers for finger amputations.
At the same time the dark legal clouds were gathering after the 2009 recall, Maclaren USA suddenly lost its right to distribute Maclaren products in the Fall of 2010—this came from the only public statement on the bankruptcy by Maclaren, sent to web site Baby Gizmo.
Maclaren USA (American Baby Products) declared bankruptcy December 29, 2011. Yet Maclaren continued to ship (and continues to ship today) under the name Maclaren North America.
So what is the difference between Maclaren USA and Maclaren North America? It appears both were run by former Maclaren chairman Bahman Kia—Kia sent us an email October 3 when we requested an update in Maclaren for 2012. That is now curious because Kia is listed as the Chairman of Maclaren USA on the bankruptcy filing (he tells the New York Times he is now no longer involved with Maclaren). Hence, it appears that Kia was both simultaneously running Maclaren North America (the entity acting as Maclaren’s distributor in 2011) and Maclaren USA (since Kia is listed on the filing).
Why the elaborate shell game? As Netto says above, the goal was to drain the assets of Maclaren USA, file for Chapter 7 bankruptcy liquidation—and avoid paying a dime to the parents of the injured kids, as legal judgements are nullified in most Chapter 7 filings. That’s a “fraudulent conveyance,” a Dallas bankruptcy attorney told the Huffington Post.
It is interesting that Maclaren chose to file for bankruptcy in Connecticut, a backwater for company bankruptcy proceedings (most are filed in New York or Delaware). Was Maclaren hoping to get an inexperienced trustee to supervise the liquidation, hoping he or she wouldn’t ask too many questions about whether Maclaren intentionally drained the assets of Maclaren USA in order to avoid its creditors?
For the record, Maclaren has not responded to our requests for comment.
We’ll keep you posted on this case as it develops!