IN THE UNITED STATES BANKRUPTCY COURT

FOR THE EASTERN DISTRICT OF VIRGINIA

(RICHMOND)

In re:

GYMBOREE GROUP, INC., et al.,

1

 Debtors,

________________________________________

KATHERINE POCRASS on behalf of herself and 

all others similarly situated, 

Plaintiff,

v.

GYMBOREE GROUP, INC., GYMBOREE 

INTERMEDIATE CORPORATION, 

GYMBOREE HOLDING CORPORATION, 

GYMBOREE WHOLESALE, INC., GYMMARK, INC., GYMBOREE OPERATIONS, INC., 

GYMBOREE DISTRIBUTION, INC., 

GYMBOREE MANUFACTURING, INC., 

GYMBOREE RETAIL STORES, LLC, GYMCARD, LLC, AND GYMBOREE ISLAND, LLC,

 Defendants.

Bankr. Case No. 19-30258-KLP

Chapter 11

Joint Administration Requested

ADVERSARY CLASS ACTION 

COMPLAINT

Adv. Case No. ____________

Katherine Pocrass (“Plaintiff”) alleges on behalf of herself and a class of similarly situated 

former employees of Gymboree Group, Inc., Gymboree Intermediate Corporation, Gymboree 

Holding Corporation, Gymboree Wholesale, Inc., Gym-Mark, Inc., Gymboree Operations, Inc., 

 

1 The Debtors in these cases, along with the last four digits of each Debtor’s federal tax identification number, are:

Gymboree Group, Inc. (6587); Gymboree Intermediate Corporation (1473); Gymboree Holding Corporation

(0315); Gymboree Wholesale, Inc. (6588); Gym-Mark, Inc. (6459); Gymboree Operations, Inc. (6463);

Gymboree Distribution, Inc. (8669); Gymboree Manufacturing, Inc. (6464); Gymboree Retail Stores, LLC

(6461); Gym-Card, LLC (5720); and Gymboree Island, LLC (1215).

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Gymboree Distribution, Inc., Gymboree Manufacturing, Inc., Gymboree Retail Stores, LLC, GymCard, LLC, and Gymboree Island, LLC (together, the “Debtors” or “Defendants”), as follows:

NATURE OF THE ACTION

1. Plaintiff and the putative class members were terminated from their jobs on or about 

January 18, 2019. 

2. Plaintiff brings this action on behalf of herself and the other similarly situated former 

employees who worked for Defendants and who were terminated without cause, as part of, or as 

the foreseeable result of, a mass layoff or plant closing ordered by Defendants on or about January 

18, 2019 and within thirty (30) days of that date, who were not provided 60 days advance written 

notice of their terminations by Defendants, as required by the Worker Adjustment and Retraining 

Notification Act (“WARN Act”), 29 U.S.C. § 2101 et seq. and the California Labor Code § 1400 

et. seq. (“CAL-WARN Act”). 

3. Plaintiff and all similarly situated employees seek to recover up to 60 days wages 

and benefits, pursuant to 29 U.S.C. § 2104 from Defendants. 

4. The WARN Act provides that two or more nominally independent companies may 

be held jointly and severally liable as a “single employer,” and also provides that parents and 

subsidiaries may be held jointly and severally liable as a “single employer”. 20 C.F.R. § 

639.3(a)(2). 

5. Defendants were the employer (as that term is defined in the WARN Act) of 

Plaintiff and the similarly situated terminated employees during the relevant time period and was 

responsible for giving them notice pursuant to the WARN Act.

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6. Plaintiff’s claims, as well as the claims of all similarly situated employees, are 

entitled to administrative priority status pursuant to the United States Bankruptcy Code § 

503(b)(1)(A) or in the alternative, wage priority status, under 11 U.S.C. § 507(a)(4) and (5).

JURISDICTION AND VENUE

7. This Court has jurisdiction over this adversary pursuant to 28 U.S.C. §§ 157, 1331, 

1334 and 1367 and 29 U.S.C. § 2104(a)(5).

8. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A), (B) and (O). 

9. Venue in this Court is proper pursuant to 28 U.S.C. § 1409, 29 U.S.C. § 2104(a)(5). 

THE PARTIES

Plaintiff

10. Plaintiff was employed by Defendants as a senior director of design and worked at 

the Defendants’ facility located at 71 Stevenson Street, Suite 2200, San Francisco CA 94105 (the 

“San Francisco Facility”) until her termination as part of a mass layoff and/or plant closing that 

began on or about January 18, 2019.

11. Plaintiff was terminated without cause.

12. Plaintiff was terminated without 60 days’ written notice. 

13. On information and belief, other similarly situated former employees who worked 

at the San Francisco Facility were also terminated on or about January 18, 2019 without cause and 

without 60 days’ written notice. 

Defendants

14. Debtors operate a business enterprise consisting of three retail brands of children’s 

clothing (Gymboree, Crazy 8, Janie and Jack), with over 900 stores in the United States and 

Canada, and franchises in other countries. 

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15. Debtor Gymboree Group, Inc. (“GGI”) is the entity that operates the Debtors’ 

executive functions and performs other corporate functions, such as human resources, information 

technology, finance, accounting, tax, treasury and legal departments. The Debtors’ other 

administrative and operational functions, including store operations, lease administration and 

marketing, are performed by Gymboree Operations, Inc. The Debtors’ wholesaling and 

international franchising operations are conducted by Gymboree Wholesale, Inc. The Debtors’ gift 

card and certificates programs are operated by Gym-Card, Inc.

16. The Debtors are funded by a revolving credit facility, with GGI as lead borrower, 

certain other Debtors as borrowers, and Gymboree Intermediate Corporation as guarantor, 

to a Credit Agreement known as the ABL Credit Agreement. 

17. At all relevant times, Debtors comprised a business enterprise that together 

operated as a single employer.

18. At all relevant times, Debtors were a joint employer of Plaintiff and its other 

employees. 

19. Until on or about January 18, 2019, Plaintiff and all similarly situated employees 

were employed by Defendants and worked at or reported to the San Francisco Facility.

20. The Debtors, like many other apparel and retail companies, have in the past several 

years fallen victim to adverse macro-trends, including the general shift away from brick-andmortar stores to online retail channels. In 2017, the Debtors filed for Chapter 11 bankruptcy in this 

Court and emerged from it with a plan that included the closure of underperforming stores and 

revised debt obligations, with the hope of improving the competitiveness of its brick and mortar 

businesses. (Bankr. Case No. 17-32986-KLP). Unfortunately, weak retail sales led to deep in-store 

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merchandise discounting, which in turn led to thinner profit margins and hampered the Debtors’ 

ability to repay its debt obligations.

21. On or about January 17, 2019, Defendants filed for Chapter 11 bankruptcy in this 

Court. (Bankr. Case No. 19-30258-KLP, ECF No. 1). 

22. Defendants, as a single employer, made the decision to terminate the employment 

of Plaintiff and the other similarly situated former employees. 

23. Following the bankruptcy filing, Defendants informed their employees that they 

would be terminated beginning on January 18, 2019. 

24. Defendants did not provide Plaintiff or the similarly situated employees with 60 

days’ notice of their terminations. 

FEDERAL WARN CLASS ALLEGATIONS

25. Plaintiff brings the First Claim for Relief for violation of 29 U.S.C. § 2101 et seq., 

individually and on behalf of all other similarly situated former employees, pursuant to 29 U.S.C. 

§ 2104(a)(5) and Federal Rules of Civil Procedure, Rule 23(a) and (b), who worked at or reported 

to Defendants’ San Francisco Facility and were terminated without cause on or about January 18, 

2019 and within 30 days of that date, or was terminated without cause as the reasonably foreseeable 

consequence of the mass layoff and/or plant closing ordered by Defendants on or about January 

18, 2019, and who are affected employees, within the meaning of 29 U.S.C. § 2101(a)(5) (the 

“WARN Class”). 

26. The persons in the WARN Class identified above (“WARN Class Members”) are 

so numerous that joinder of all members is impracticable. Although the precise number of such 

persons is unknown, it is estimated at about 400 individuals. On information and belief, the facts 

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on which the calculation of that number can be based are presently within the sole control of 

Defendants. 

27. On information and belief, the identity of the members of the class and the recent 

residence address of each of the WARN Class Members is contained in Defendants’ books and 

records.

28. On information and belief, the rate of pay and benefits that were being paid by 

Defendants to each WARN Class Member at the time of his/her termination is contained in the 

books and records of the Defendants.

29. Common questions of law and fact exist as to members of the WARN Class, 

including, but not limited to, the following:

(a) whether the members of the WARN Class were employees of the 

Defendants who worked at or reported to the San Francisco Facility;

(b) whether Defendants, unlawfully terminated the employment of the 

members of the WARN Class without cause on their part and without giving 

them 60 days advance written notice in violation of the WARN Act; 

(c) whether Defendants’ unlawfully failed to pay the WARN Class members 

60 days wages and benefits as required by the WARN Act; and

(d) whether Defendants as a single employer violated the WARN Act.

30. Plaintiff’s claims are typical of those of the WARN Class. Plaintiff, like other 

WARN Class members, worked at or reported to the San Francisco Facility and was terminated 

without cause on or about January 18, 2019 due to the mass layoff and/or plant closing ordered 

by Defendants.

31. At all relevant times, Defendants were an “employer,” as that term is defined in 

29 U.S.C. § 2101 (a)(1) and 20 C.F.R. § 639(a) and continued to operate as a business until they 

decided to order a mass layoff or plant closing at the San Francisco Facility.

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32. Defendants constituted a “single employer” of Plaintiff and the Class Members

under the WARN Act in that, among other things:

(a) The Defendants shared common ownership;

(b) The Defendants shared common officers and directors;

(c) All of the Defendants exercised de facto control over the labor practices governing 

the Plaintiff and Class Members, including the decision to order the mass layoff or 

plant closing at the San Francisco Facility;

(d) There was a unity of personnel policies emanating from a common source between 

Defendants; and

(e) There was a dependency of operations between Defendants.

33. Plaintiff will fairly and adequately protect the interests of the WARN Class. 

Plaintiff has retained counsel competent and experienced in complex class actions, including the 

WARN Act and employment litigation.

34. Class certification of these claims is appropriate under Fed. R. Civ. P. 23(b)(3) 

because questions of law and fact common to the WARN Class predominate over questions 

affecting only individual members of the WARN Class, and because a class action is superior to 

other available methods for the fair and efficient adjudication of this litigation – particularly in 

the context of WARN Act litigation, where individual plaintiff may lack the financial resources to 

vigorously prosecute a lawsuit in federal court against a corporate defendant, and damages suffered 

by individual WARN Class members are small compared to the expense and burden of individual 

prosecution of this litigation. 

35. Concentrating all the potential litigation concerning the WARN Act rights of the 

members of the Class in this Court will obviate the need for unduly duplicative litigation that might 

result in inconsistent judgments, will conserve the judicial resources and the resources of the 

parties and is the most efficient means of resolving the WARN Act rights of all the members of 

the Class. 

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36. Plaintiff intends to send notice to all members of the WARN Class to the extent 

required by Rule 23.

CAUSE OF ACTION (FEDERAL WARN ACT)

37. Plaintiff realleges and incorporates by reference all allegations in all preceding 

paragraphs.

38. At all relevant times, Defendants employed more than 100 employees who in the 

aggregate worked at least 4,000 hours per week, exclusive of hours of overtime, within the United 

States.

39. At all relevant times, Defendants were an “employer,” as that term is defined in 29 

U.S.C. § 2101 (a)(1) and 20 C.F.R. § 639(a) and continued to operate as a business until it decided 

to order a mass layoff or plant closing at the San Francisco Facility.

40. At all relevant times, Plaintiff and the other similarly situated former employees 

were employees of Defendants as that term is defined by 29 U.S.C. §2101. 

41. On or about January 17, 2019, the Defendants ordered mass layoff or plant closing 

at the San Francisco Facility, as that term is defined by 29 U.S.C. § 210l(a)(2).

42. The mass layoff or plant closing at the San Francisco Facility resulted in 

“employment losses,” as that term is defined by 29 U.S.C. §2101(a)(2) for at least fifty of 

Defendants’ employees as well as thirty –three percent of Defendants’ workforce at the San 

Francisco Facility, excluding “part-time employees,” as that term is defined by 29 U.S.C. § 

2l01(a)(8).

43. Plaintiff and the Class Members were terminated by Defendants without cause on 

their part, as part of or as the reasonably foreseeable consequence of the mass layoff or plant 

closing ordered by Defendants at the San Francisco Facility.

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44. Plaintiff and the Class Members are “affected employees” of Defendants, within 

the meaning of 29 U.S.C. § 2101(a)(5).

45. Defendants were required by the WARN Act to give the Plaintiff and the Class 

Members at least 60 days advance written notice of their terminations.

46. Defendants failed to give Plaintiff and the Class members written notice that 

complied with the requirements of the WARN Act.

47. Plaintiff and each of the Class Members are, “aggrieved employees” of the 

Defendants as that term is defined in 29 U.S.C. § 2104(a)(7).

48. Defendants failed to pay Plaintiff and each of the Class Members their respective 

wages, salary, commissions, bonuses, health and life insurance premiums, accrued holiday pay 

and accrued vacation for 60 days following their respective terminations, and failed to provide 

employee benefits including health insurance, for 60 days from and after the dates of their 

respective terminations.

49. The relief sought in this proceeding is predominately equitable in nature.

PRAYER FOR RELIEF

WHEREFORE, Plaintiff, individually and on behalf of all other similarly situated 

persons, prays for the following relief as against Defendants, jointly and severally:

A. Certification that, pursuant to Fed. R. Civ. P. 23 (a) and (b) and 29 U.S.C. § 2104(a)(5), 

Plaintiff and the other similarly situated former employees constitute a single class;

B. Designation of Plaintiff as Class Representative;

C. Appointment of the undersigned attorneys as Class Counsel;

D. A judgment in favor of Plaintiff and each of the “affected employees” equal to the sum 

of: their unpaid wages, salary, commissions, bonuses, accrued holiday pay, accrued 

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vacation pay, health and life insurance, and other ERISA benefits, for 60 days, that 

would have been covered and paid under the then-applicable employee benefit plans 

had that coverage continued for that period, all determined in accordance with the 

WARN Act, 29 U.S.C. § 2104(a)(1)(4) and California Labor Code § 1402(a);

E. Treatment of all damage claims as first priority administrative expense pursuant to 11 

U.S.C. § 503(b)(l)(A), or alternatively priority status pursuant to 11 U.S.C. § 

507(a)(4) or (5) and the remainder as a general unsecured claim;

F. Plaintiff’s reasonable attorneys’ fees and the costs and disbursements that the Plaintiff 

incurred in prosecuting this action, as authorized by the WARN Act, 29 U.S.C. § 

2104(a)(6), as well as by California Labor Code § 218.5 and any other applicable state 

law providing for attorneys’ fees; 

G. Interest as allowed by law on the amounts owed under the preceding paragraphs; 

 and

H. Such other and further relief as this Court may deem just and proper.

Dated: January 26, 2019

Respectfully submitted,

By: /s/ Haig V. Kalbian

Haig V. Kalbian VAB 32658

D. Michelle Douglas VAB 74838

KALBIAN HAGERTY LLP

888 17th Street, N.W.

Suite 1000

Washington, DC 20006

Phone Main: 202-223-5600

Phone Direct: 202-419-3296

Fax: 202-223-6625

Jack A. Raisner (pro hac vice forthcoming)

René S. Roupinian (pro hac vice forthcoming) 

OUTTEN & GOLDEN LLP

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685 Third Avenue, 25th Floor

New York, New York 10017

Tel.: (212) 245-1000

Email: rsr@outtengolden.com

Email: jar@outtengolden.com 

Attorneys for Plaintiff and the putative Class

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