On Dec. 17, plus-size fashion retailer Ashley Stewart filed for bankruptcy in the U.S. Bankruptcy Court for the District of New Jersey. A little over a week later, on Dec. 29, the filing was dismissed on the grounds that it was made “without proper corporate authority.”
The initial bankruptcy filing was authorized by a “newly reconstituted board” to challenge a November 2025 deal for a foreclosure sale of the company’s assets to G Ashley Inc., an entity that the filers allege “is controlled by former insider management,” according to Bondoro. However, Mandelbaum Barrett PC, which represented the “authorized Board of Directors of Ashley Stewart, Inc.,” was successful in having the filing dismissed on the grounds that the filers had circumvented “established corporate governance” and various state court orders.
“This ruling reinforces a fundamental principle of bankruptcy law, that a company cannot seek Chapter 11 protection without proper corporate authorization,” said Jeffrey Rosenthal, Partner and Chair of Mandelbaum Barrett PC’s Bankruptcy and Creditors’ Rights Practice Group, in a statement.
With Chapter 11 off the table for now, liquidation appears likely, according to The Street. While Ashley Stewart stores and its website remain open, creditors are now free to pursue their claims with no bankruptcy protections in place.
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The plus-size sector has faced headwinds in recent years as wider sizing spectrums have become popular at major brands, causing labels that specialize in specific size ranges to lose their point of differentiation. Similar challenges have been experienced at Avenue, Ascena Retail’s plus-size Lane Bryant and Catherine’s businesses and bankrupt-and-back FullBeauty.
