JNCO jeans were once an unavoidable emblem of ’90s fashion, the ultrawide 35-inch pant legs marking the extreme endpoint of the baggy-jeans craze that suddenly draped the lower limbs of suburban teens and ravers across the country.

Though the fad went the way of the Furby and Tae Bo some 15 years ago, the L.A. company that created the product is still around – but, like the pants, it’s barely hanging on.

Boyle Heights’ J&Company Jeans is today a small-time apparel business selling decidedly nonbaggy jeans and other clothing items to discount stores – and fighting intensely with creditors.

One of its lenders, First Capital, claims the company has defaulted on loans and it is battling to seize the apparel maker’s assets. The lender claims the company’s inventory and accounts have dwindled to no more than $700,000, and so it is also going after the assets of owner Haim Milo Revah as well as one of J&Company’s clients.

Much of the money once made by the company, which hit annual sales of $187 million at its peak, appears to have gone into ill-timed real estate ventures. Revah acquired an office building portfolio exceeding $1 billion in 2006 and 2007, including the New York skyscraper that housed Bernie Madoff’s former offices, only to lose most of it after the real estate collapse.

Though poorly timed, the acquisitions were not out of the ordinary.

“What happens for the most part is that apparel industry money doesn’t get poured back into the business. It goes into real estate,” said Ilse Metchek, president of trade group California Fashion Association. “It’s very common that you make your money in a quick-turn fashioncentric business and then you put it elsewhere. And you may not be as smart elsewhere as you were in the apparel business.”

Revah did not return requests for comment. First Capital declined to comment through its attorney.

Brothers Haim and Jacques Revah came to Los Angeles from France and co-founded what was then Revatex, a maker of private-label clothing, in 1985. The company took off in the mid-’90s on the success of its JNCO brand jeans, which Haim Revah said was inspired by clothing he saw worn in East Los Angeles (JNCO has been alternately reported to stand for “Jeans Co.” and “Judge None, Choose One”). The product’s success was due to a confluence of savvy promoting – the company relied on underground marketing such as paying graffiti artists to paint murals in front of high schools – and what turned out to be the fortunate bankruptcy of its biggest client, New York’s Merry-Go-Round Enterprises. Merry-Go-Round was forced to sell off JNCO jeans at a discount, and it was at those fire sales that trendier boutiques discovered the product.

Suddenly, the underground product was in every store at the mall. JNCO accounted for about 10 percent of Pacific Sunwear’s sales in 1997 and Gadzooks sold about 300 pairs per store in the fall of 1998.

Sales reportedly jumped to $187 million in 1998 from $66 million in 1996. Profits totaled $78 million during those three years.

BMX bikers, skateboarders and rock bands like Limp Bizkit started sporting the jeans – often supplied by the manufacturer.

“If you can’t pronounce ‘JNCO,’ you’re hopelessly out of touch,” Fortune magazine wrote in a 1998 profile.

A character on the company’s website, Flamehead, even got his own comic book, and JNCO opened a short-lived boutique store on Melrose Avenue.

Youth culture

The brothers were for a moment at the center of an American culture they had so admired in their youth, watching reruns of “Starsky & Hutch” and “Charlie’s Angels” in France. Locally, they got involved in Jewish organizations and philanthropy. Haim Revah sponsored a pediatric infectious diseases fund at Cedars-Sinai Medical Center and was named man of the year at a fashion industry fundraiser for the facility.

But the fashion market is fickle, and just as quickly as JNCO took off, the fad for ultrawide jeans died. Sales dropped by nearly half in 1999, and the company’s 250-employee L.A. factory was shut down the following year.

“There are spurts of the jean business being the fashion statement, and they were in that,” Metchek said. “But it has a life cycle of its own. You have brands right now that I would safely predict will not be here in 10 years.”

JNCO attempted several reboots, but with limited success. It introduced a new denim line, J&Co, in 2003 and a junior denim line in 2004. The company began formally doing business as J&Company in 2006, transferring the assets from Revatex to the new enterprise.

J&Company stopped production of the J&Co line in 2008, then announced it would relaunch the line in fall 2012 with suits and sportswear for men and women, although it’s unclear whether that new line got off the ground. Last year, the company launched a rave-inspired brand, J+Co.

While J&Company was scaling down and relaunching, Haim Revah focused heavily on real estate. In 2005, he formed Metropolitan Real Estate Investors in Los Angeles, and in a one-year period, beginning in late 2006, the company acquired office buildings valued at more than $1 billion, primarily in New York and Dallas, through various limited liability corporations.

But he was buying at the peak of the real estate bubble, paying a reported $648 million for the famed Lipstick building in New York, which had sold for $235 million just three years prior and was home to Madoff’s infamous investment company.

He also poured more than $100,000 into political donations during the 2008 election cycle, most of it to funds supporting the John McCain-Sarah Palin presidential ticket and Rep. Eric Cantor campaign.

When the real estate market crashed, Metropolitan struggled to pay debts. The entity formed to buy the Lipstick building defaulted on a $210 million loan, filed for bankruptcy and was forced to give up the property in 2010. (Another pair of L.A. denim pioneers from France, Guess co-founders Paul and Maurice Marciano, teamed with investors to take control in a deal that valued the building at $395 million.) Metropolitan also defaulted on a $177 million loan on its Comerica Bank building, the third-tallest building in Dallas, which it bought for an estimated $216 million in 2006 (Haim Revah told the Wall Street Journal he bid that amount on the advice of a rabbi, saying, “I don’t know how the rabbi did it, but at the end of the day, it was the best price possible”). The building fell into receivership and was resold last year.

Metropolitan also made at least one play outside of real estate, making an unsuccessful $200,000 bankruptcy sale bid in 2011 for the Anchor Blue apparel brand.

More troubles

Now, J&Company has also run into debt troubles, albeit on a much smaller scale. As Revatex, the apparel company secured financing from the L.A. office of Boca Raton, Fla.’s First Capital in 2005, according to a lawsuit filed by First Capital in January. Court documents show that the two entered into a factoring agreement, a form of financing popular in the garment industry in which a lender advances cash in exchange for a debtor’s accounts receivable. First Capital agreed to make advances of up to $5 million.

In December of last year, J&Company allegedly defaulted and failed to provide financial statements. Suspecting the company was insolvent, First Capital declared some $836,000 due and sued. The lender is seeking a court order to seize some of J&Company’s assets. A hearing on that order is scheduled this week.

First Capital further alleges that in addition to not making debt payments, J&Company maneuvered to have clients pay it directly instead of the lender. J&Company allegedly sold $500,000 worth of girls’ polos, embossed T-shirts and other garments to Gardena discount retail chain Fallas Paredes. First Capital argues that the payment for those garments should have gone directly to it according to the factoring agreement, but instead was secretly paid to J&Company.

First Capital filed a separate lawsuit against Fallas Paredes last month.

The lender also named Haim Revah in its lawsuit against J&Company, claiming that he personally guaranteed J&Company’s debts. It’s unclear whether Jacques Revah still has a role in the business – his LinkedIn profile lists him as president of Flamehead Inc., which shares an address with J&Company and was Revatex’s boys’ line in the late 1990s.

Kenneth N. Russak, an attorney who reviewed the case for the Business Journal, said it was unusual for lenders to allege that a debtor’s customers had sidestepped a factoring agreement, and that the case could end up with the company filing for bankruptcy.

“If a remedy is granted, and especially if a receivership order is entered, the typical response is more likely than not that the borrower will file an involuntary bankruptcy petition,” he said. “That’s one of many possible outcomes here.”