Founded in Quebec in 1990, La Senza grew to become one of the biggest sellers of women’s underwear in Canada before being bought up by the owners of U.S. lingerie giant Victoria’s Secret in 2007.

In early 2019, La Senza’s owners then sold the company to a California-based private equity firm called Regent LP. As part of that deal, La Senza was supposed to secure a letter of credit from the previous owners that would guarantee payment for suppliers like MGF if they continued to send products to La Senza. According to court documents, that never happened, and MGF says La Senza now owes them almost $42 million for goods that have already been sent off to La Senza to sell.

«Despite MGF’s efforts to work in good faith with La Senza to find solutions, La Senza regularly disregarded its obligations and ultimately refused to provide MGF with adequate assurances of future performance,» MGF says in a court filing, adding that the retailer has become «increasingly infrequent» in its communications with its supplier.

«MGF also demanded that La Senza stop selling goods sourced by MGF and return them, but La Senza has not done so.»

According to court documents, two other La Senza creditors — Sri Lanka-based Ocean Lanka Ltd. and Teejay Lanka PLC — are also backing the petition, although they say they are owed far less: $731,805.50 for the former, and $195,209 for the latter.

According to its website, La Senza has 340 stores around the world, roughly one third of which are in Canada.

When companies are trying to restructure but plan to continue to operate in some form, they typically voluntarily file under Chapter 11 of the U.S. banktruptcy code. But MGF has petitioned the court under Chapter 7 of the code, a section of the law typically used by creditors trying to push companies into total liquidation to pay off their bills.

Requests for comment from MGF, La Senza and the retail chain’s owner, Regent LP, were not immediately returned on Thursday.