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Sunday, May 20, 2012
Updated: May 18, 1:39 PM ET
CoreUPT files for Chapter 11

By John Symms
ESPN.com

The CoreUPT booth at Winter X Games Tignes in France.

French ski brand CoreUPT has filed for Chapter 11 bankruptcy. The company, which was founded by four-time freeskiing world champion Guerlain Chicherit, has until July 16 to find a new source of capital to sustain its operations.

Failure to find a new investor or other source of capital by July 16 would downgrade CoreUPT's status to Chapter 7 bankruptcy, which calls for the liquidation and redistribution of the brand and its assets. "We have two ways [to go]," said CoreUPT General Manager Pierre Gjurasevic, "the first being a capital increase from a new investor, or for the second, a handover of the brand."

"For now they are very bad outcomes," said Gjurasevic. "It's not very comfortable but we work hard and I'm sure we will find a solution in a few weeks." According to Gjurasevic, CoreUPT is already in talks with 10 different potential investors from the United Kingdom, the U.S., Russia and France.

The trouble started for CoreUPT in January 2011. At that time CoreUPT was raising funds and courting investors to finance production on its hardgoods line and an expansion into technical outerwear. Says Gjurasevic, "Even with promises from different investors, we didn't realize [a sufficient] increase of capital." As a result, CoreUPT's product deliveries had to be delayed that year in North America and elsewhere in the world.

The worst came early this month when the bank financing CoreUPT terminated the brand's line of credit, also seeking immediate repayment of money loaned since March 2012. That development forced CoreUPT to seek protection under Chapter 11 and buy additional fundraising time.

At present, it appears that skiers will see CoreUPT products in stores through the next ski season. Earlier this month, Powdermag.com reported that the investment firm MacManus Group has already provided funds to sustain production through the 2012-2013 winter season. Gjurasevic confirmed that report saying, "Everything is on track to be on snow next winter."

CoreUPT debuted in the freeskiing market in 2008. The brand attracted attention instantly with a star-studded professional team that included Candide Thovex, TJ Schiller and Colby James West. While each of those athletes, with the exception of founder Chicherit, have moved on to different sponsors, today's CoreUPT team — highlighted by two-time Winter X pipe champ Kevin Rolland, 2011 Winter X Europe slope champ JF Houle and 2011 Winter X Europe pipe silver medalist Justin Dorey — is equally high profile.

"The international team, the junior team and all the CoreUPT athletes who built our success over the last four years are a high priority for us and for the potential investors," said Gjurasevic.

Still, the high priority of athletes referenced by Gjurasevic can be upheld only if the company can find investors to right its cash flow issues before the July 16 deadline. If CoreUPT ultimately cannot avoid bankruptcy, the law would place athletes, who work as independent contractors for the companies they represent, in the lowest priority group, behind taxes, employee wages and secured creditors, for a share of redistributed assets.