William B. Contractors Seek Payment in Excess of $50,000

Several local apparel contractors are seeking more than $50,000 in payment from Royal Apparel Group for sewing work completed for the manufacturer’s William B. contemporary women’s label.

Los Angeles-based Didi of California, which currently produces apparel for contemporary label Vince and better misses labels by John Paul Richards and Vikki Vi, is owed about $10,000 for work completed for Royal Apparel, according to owner Aldo Garrolini.

Didi of California has been producing apparel for William B. since last year. Garrolini said he tried repeatedly to contact the company for payment and got no response. He said he eventually got a check for $5,000 from Royal Apparel Group and a personal check for $5,000 from the company’s controller, Ivan Barenbaum, but the personal check was returned for insufficient funds. Garrolini said he still has about $10,000 worth of unfinished merchandise in his possession, which he has refused to release to the company without payment.

Garrolini said he tried to issue a complaint to the state labor board, but an official there said he could not help him. His efforts to retrieve payment through a collection agency were also unsuccessful. Garrolini now plans to file a complaint with the Los Angeles County district attorney’s office.

“It’s a hard position to be in,” Garrolini said. “It happens a lot in this industry.”

Alhambra, Calif.-based Ritz Companyand Wilson Company and Los Angeles-based Cho Won Inc., Star Avenue, Park Pleating, Ametexand Fong’s Cutting each claim to be owed several thousand dollars by Royal Apparel Group.

Wilson Company said it hired a collection agency to retrieve $8,100 from Royal Apparel Group for a large order of women’s trousers. Ametex said it is trying to retrieve $11,000 from Royal Apparel Group for women’s tops and bottoms. Star Avenue owner Hyonsunkim Kim said his company completed a $6,000 order, for 400 women’s linen blouses, for which it has not yet been paid by the manufacturer.

“There is no one to help us get paid for our work so we can run our business,” Kim said.

Royal Apparel Group has been producing the William B. label since early 2002, when it acquired the then-insolvent label from CIT Group. Royal Apparel formed a limited liability corporation, and William B. founder William Beranek remained on as an employee until last month, when he left Royal Apparel to launch a new apparel business.

“My understanding is CIT foreclosed on certain assets of the company, [and] those assets were transferred to Royal Apparel Group LLC,” said Greg Weisman, an attorney with Los Angeles-based Silver & Freedman, which represents Beranek.

Last month, Royal Apparel closed the William B. showroom at the New Mart building in downtown Los Angeles, according to the building’s management.

Royal Apparel Group owner Nick Deleo referred all inquiries to the company’s attorney, Mark Brutzkus.

“Royal Apparel bought the William B. label from CIT in a foreclosure sale” last summer, said Brutzkus, a partner in Encino, Calif.-based Ezra & Brutzkus, who has represented Royal Apparel since its acquisition of the William B. label.

“William B. Inc. was having significant financial problems,” he said. “Royal Apparel bought the label, they bought other assets, they bought certain of the orders going forward and effectively started the company fresh.”

Stan Levy, an attorney at Manatt, Phelps and Phillips in Los Angeles, said there is little protection for sewing contractors.

“If the contractor continues to pay the workers, then there is nothing that either the state labor commissioner or the department of labor can do until the contractor reports to the labor board that it can no longer pay the workers because they didn’t get paid by the manufacturer,” explained Levy. “Then it becomes a breach of contract between the contractor and manufacturer.”

Under state law, the sewing contractor can file a lawsuit against a company that has withheld payment, but proving a claim can be difficult, said Joseph Rodriguez, executive director of the Garment Contractors Association of Southern California Inc. Other than contacting local authorities, Rodriguez said the only action the contractor can take is to threaten to boycott the company and inform other contractors not to do business with the company.

“If business is bad because the label isn’t selling, they won’t pay the contract and they’re going to look for any excuse to not pay them,” Rodriguez said. He added that manufacturers often claim that merchandise is damaged or poorly made long after they have already accepted it.

“That’s when it becomes a very difficult case to prove in court, even if the contractor has the resources to hire a lawyer—which most of the time they don’t,” Rodriguez said. “It becomes a he said/she said situation.”

With additional reporting by Alison A. Nieder