The liquidation of Ohio-headquartered Top 40 supplier Heritage Sportswear (asi/60582) is proceeding and could take a period of months, according to an attorney involved with the process.

“The exact timing for these processes varies from case to case,” said attorney David G. Dragich, who represents Heritage’s court-appointed receiver Gene R. Kohut -- a kind of financial superintendent who is overseeing the liquidation. “The receiver will proceed in a timeframe that maximizes the ultimate return to creditors of the receivership estate.

Attorney David G. Dragich

Heritage will not be fully staffed during the ongoing liquidation, but some employees will remain to assist with things like processing orders in what Dragich described to Counselor as “the ordinary course of business.” A source said at least some employees were told they could be around for 15 to 20 weeks; it was unclear if Heritage would be processing orders for the promo industry for all of that time.

On April 24, a federal judge issued an order that allowed Heritage Sportswear, the 10th largest supplier in the promotional products industry, to be liquidated. The order came after Kohut filed a motion asking for the liquidation on the grounds that Heritage was in deep financial trouble, unable to sustain itself and incapable of meeting obligations to creditors, with no realistic options for continuing as a viable business.

Sad, sad news for the #promotionalproducts market: It's now official that the industry's 10th largest supplier is being liquidated. https://t.co/OscrWtaxZ2 @asicentral @Tim_Andrews_ASI @ASI_AndyCohen @PKennedy_ASI @VagnoniASI

— Chris Ruvo (@ChrisR_ASI) April 24, 2019

Founded in 1982, Heritage has locations in Ohio, Virginia, Indiana and Florida, according to court documents. The company, which sells everything from polos and T-shirts, to outerwear, headwear and more, reported flat industry sales of $141.6 million in 2017 due to what it characterized as “market conditions.” Court papers indicate 2018 sales were in the $150 million range, but still not enough to stem the tide of cash flow challenges that left the supplier in financial straits. In 2013, Heritage acquired former Top 40 supplier Virginia T’s, but later dropped the Virginia T’s branding. Sources have indicated that troubles with integrating Virginia T’s were among the challenges Heritage faced.