Japanese Creditors File Stila Corp Involuntary Bankrupy

CORRECTED (Reuters) -Three Japanese companies filed an involuntary bankruptcy petition against Stila Corp in a Delaware court, saying it had failed to pay its debts, according to court documents.

Stila Corp is no longer associated with Stila Styles, which has a cult following for its trendy lipgloss and eyeshadow products and is now owned by Patriarch Partners.

The creditors listed in the filings made on Wednesday are cosmetics makers Tokiwa Corporation, JO Cosmetics Co and Nihon Kolmar Co, all based in Japan. Together they list claims for sale of goods totaling $812,448.

Stila Corp was once owned by Estee Lauder (EL.N: Quote, Profile, Research, Stock Buzz) and was sold to Sun Capital in 2006. Private equity firm Patriarch bought the cosmetics assets from Stila’s lenders after they foreclosed on the company, creating Stila Styles.

Under U.S. law, creditors may begin an involuntary bankruptcy case to force a debtor to confront them. The alleged debtor has 20 days to object to the filing.

In a Chapter 7 bankruptcy, a trustee is typically appointed and the company is liquidated.

Stila Styles is headquartered in Glendale, California. Stila Corp is incorporated in Delaware.

The lawyer for the three Japanese companies that filed the petition was not immediately available.

The case is in Re: Stila Corp. U.S. Bankruptcy Court, District of Delaware, No. 09-12115. (Reporting by Caroline Humer, Editing by Maureen Bavdek)

(Corrects throughout to show that the bankruptcy petition was filed against Stila Corp, which is no longer associated with Stila Styles LLC)