Maclaren bankruptcy case prompts questions

Jane Kitchen -- Kids Today, 3/6/2012 3:33:27 PM

Norwalk, Conn. —  Maclaren USA quietly filed for Chapter 7 bankruptcy protection on Dec. 29, a move that went unnoticed until reports began to surface last week, uncovered initially by the blog daddytypes.com.

The daddytypes.com report has since prompted interest from the New York Times, The Wall Street Journal, The Huffington Post, and other mainstream media.

While American Baby Products Inc., the parent company of Maclaren USA, has filed for Chapter 7, Maclaren also has other headquarters throughout the world, and the company's products are still being sold.

Chapter 7 bankruptcy ends in liquidation rather than reorganization, and also specifically discharges a company from lawsuit judgments - which some reports suggest may be key to the filing.

This is because listed as creditors on the filing are families of seven children currently involved in litigation with Maclaren USA.

Maclaren recalled more than 1 million strollers in 2009 after reports that the stroller's hinge mechanism posed a fingertip amputation and laceration hazard when the stroller was folded. As of May 2011, Maclaren had received a total of 149 incidents with the strollers, including a total of 17 fingertip amputations.

A compliance investigation with the U.S. Consumer Product Safety Commission is also listed as still pending.

Maclaren's Hong Kong office is listed as the biggest creditor, with Maclaren USA owing Maclaren HK $13.1 million.

And strangely, while Maclaren lists more than $20 million from the sale of goods in 2010, that number is just $34,000 for 2011.

Also listed as a creditor is The Netto Collection, owed $1.1 million from the sale of the company to Maclaren. David Netto was until recently creative director for Maclaren Nursery, but on Feb. 27, Netto Tweeted, "I have resigned as creative director of maclaren nursery today and am disassociating myself from the company."

Netto seems to be the only one talking; none of the major news media were able to get comments from Maclaren headquarters or from Maclaren USA CEO Farzad Rastegar.

"Don't you love it when the CEO, chairman and head of pr are all unavailable to the NYTimes? ‘Nothing to see here...'," Netto Tweeted on March 3.