Exit “The Knockoff King”

VICTOR COSTA, THE MAN WHO made his reputation dressing Dallas’ divas with flamboyant frocks, gushes from his new offices at New York’s Nahdree dress company, where he is hard at work on next season’s collections. “I’m really enjoying the theater, the opera, the ballet,” he says. “I feel like I’m on vacation.”

While Costa lives the good life, though, the problems that led to his departure from Dallas linger, entangled in the bows and knots of Judge Harold C. Abramson’s federal bankruptcy court. Here, the picture is anything but pretty.

In January of this year, Costa filed chapter 11 due to mounting expenses related to the lawsuit filed by a former fitting model, Lorna Pilgrim, who claimed sexual harassment among other grievances. Then, in early May, Victor Costa Inc. filed for chapter 7 bankruptcy.

Bankruptcy documents show the extent of Costa’s woes. Pilgrim’s proof of claim, fixing her status as an unsecured, non-priority creditor, was allowed on July 21 in the amount of $1,536,977, including amounts for lost wages, attorneys fees, and $1 million for pain and suffering.

However, even before Pilgrim’s claims are factored in, Costa is carrying $1,609, 308 in unsecured debts, including more than $100,000 in legal costs relating to Pilgrim v.Costa, a $1,104,479 personal loan from Hamon Operating Co., $14,908 in credit card debt, and $15,657 in back lease money to Highland Park Village. Mercedes-Benz Credit Corp. filed motions to seize Costa’s 1987 Mercedes 560 if he missed any further payments.

Listed as one of Costa’s assets is the $1.6 million loan he once made to his business, Victor Costa, Inc. Assuming that Costa never recoups this loan, and factoring in the Pilgrim claim, the designer’s personal balance sheet blazes in fall’s fashionable red: negative $2,933,943,26.