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'Angry and in Shock': Fashion Label Orders Former Sales Reps to Return Commissions in Wake of Bankruptcy The once upscale NYC-based fashion label went under in 2020. Now, former stylists are being ordered to return commissions earned prior to the company's collapse.

By Madeline Garfinkle Edited by Jessica Thomas

Opinions expressed by Entrepreneur contributors are their own.

Audtakorn Sutarmjam / EyeEm | Getty Images

Founded in 1991, the Worth Collection established an exclusive shopping experience with its stylist network and appointment-only shopping. However, almost 30 years after its founding, the company faced a "tenuous future," and was forced into Chapter 7 bankruptcy in February 2020.

Now, three years later, dozens of former stylists have been given the news that they'll have to return thousands of dollars worth of commissions earned before the company's collapse. About 200 former stylists were ordered by U.S. bankruptcy trustee Douglas Tabachnik to settle their debts or be served lawsuits, The New York Post reported.

"We are angry and in shock," former Worth stylist Andrea Greenspan, who was asked by Tabachnik to repay $19,000 worth of commissions, told the outlet. "There are women who are widowed, divorced or single mothers who are supporting their families and have to hire lawyers now."

Related: 5 Ways Retailers Can Win In a Post-Pandemic World

The trustee claims stylists were aware of the company's financial fate and knew Worth intended to file for bankruptcy. However, the former stylists told The Post that wasn't the case.

"The bank instructed Worth's president, who instructed the stylists in numerous emails to continue to sell," Michele Baena, who is being sued for $52,000, told the outlet. "We were selling through a season so we could receive larger commissions, but we had no knowledge of a bankruptcy."

The stylists aren't the only ones who are affected by the company's collapse. Tabachnik shared with the Post that vendors have also been burned by Worth's liquidation.

"These people were paid money that perhaps should have gone to a vendor who was also unaware that the company wouldn't be able to pay their bills," he said. "The objective of the bankruptcy code is to distribute the unfairness equally."

Related: Bed Bath & Beyond Plans to Raise Over $1 Billion to Pay Debts and Avoid Bankruptcy

Madeline Garfinkle

News Writer

Madeline Garfinkle is a News Writer at Entrepreneur.com. She is a graduate from Syracuse University, and received an MFA from Columbia University. 

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