The increasing sales in the late 1980s were not enough to stave off bankruptcy, however.
Ben Cooper, Inc.'s financial problems became so severe in 1988 that many customers left the firm and diverted licenses and business to its biggest competitor, Collegeville.
The company filed for Chapter 11 bankruptcy on March 13, 1988.
As a privately held company, little financial data was available on its profit margins.
 However, one press report estimated the firm's profit margin below 10 percent in 1989.
On January 6, 1989, the company's facility in Georgia burned to the ground, destroying (the company said) $2 million to $3 million in inventory ($4,125,101 to $6,187,651 in 2019 dollars).
Cooper's two insurance companies canceled coverage of the firm and refused to pay, citing inaccuracies in the insurance policy.
The bankruptcy court refused to consider Cooper's claims against the insurance companies.
Cooper appealed the court's ruling.

Ben Cooper, Inc. emerged from bankruptcy in April 1989 after paying all its creditors in full.

The United States Court of Appeals for the Second Circuit determined in February 1990 that the issue of the insurance coverage was "core" and thus should be heard by the bankruptcy court.
One of the insurance companies appealed to the Supreme Court of the United States.
In a per curiam decision, the Supreme Court held that a serious jurisdictional issue had been brought to the court's attention by legal briefs, forcing it to vacate the appellate court's decision, remanding the case back to the appellate court, and asking the appellate court to consider the jurisdictional issue.
The 2nd Circuit Court of Appeals considered the jurisdictional issue, found in Cooper's favor, and reinstated its original ruling in January 1991.

Just days after the appellate court's second ruling, executives of Ben Cooper, Inc. announced they were moving the company to Greensboro, North Carolina.
The company said at this time that it had 35 permanent employees, and manufactured and supplied more than 4 million costumes in the previous year.
It said it controlled 70 to 80 percent of the licensed costume character costume business, and was partnered with companies such as Children's Television Workshop (producers of Sesame Street), DC Comics, Mattel, and Walt Disney Studios.
It said the reason for the move was to be closer to Southern textile factories and cutting shops, so that it could move away from the environmentally harmful vinyl costumes it had obtained from Asia and toward more acceptable natural fabrics.
The company hoped to invest $6 million ($11,262,644) in building its new Greensboro facility, and said it would apply for a $600,000 Community Development Block Grant to help defray costs and provide jobs to low-income workers in the area.

But on October 30, 1991, Ben Cooper, Inc. filed for Chapter 11 bankruptcy yet again.
The company's chief executive officer said the cause of the second bankruptcy was due to relocation expenses, the early 1990s recession, and delays in obtaining bank loans.
The company was not able to survive as an independent firm, however, and was bought by Rubie's Costume Co. in 1992.
The increasing sales in the late 1980s were not enough to stave off bankruptcy, however. Ben Cooper, Inc.'s financial problems became so severe in 1988 that many customers left the firm and diverted licenses and business to its biggest competitor, Collegeville. The company filed for Chapter 11 bankruptcy on March 13, 1988. As a privately held company, little financial data was available on its profit margins.  However, one press report estimated the firm's profit margin below 10 percent in 1989. On January 6, 1989, the company's facility in Georgia burned to the ground, destroying (the company said) $2 million to $3 million in inventory ($4,125,101 to $6,187,651 in 2019 dollars). Cooper's two insurance companies canceled coverage of the firm and refused to pay, citing inaccuracies in the insurance policy. The bankruptcy court refused to consider Cooper's claims against the insurance companies. Cooper appealed the court's ruling.
Ben Cooper, Inc. emerged from bankruptcy in April 1989 after paying all its creditors in full.
The United States Court of Appeals for the Second Circuit determined in February 1990 that the issue of the insurance coverage was "core" and thus should be heard by the bankruptcy court. One of the insurance companies appealed to the Supreme Court of the United States. In a per curiam decision, the Supreme Court held that a serious jurisdictional issue had been brought to the court's attention by legal briefs, forcing it to vacate the appellate court's decision, remanding the case back to the appellate court, and asking the appellate court to consider the jurisdictional issue. The 2nd Circuit Court of Appeals considered the jurisdictional issue, found in Cooper's favor, and reinstated its original ruling in January 1991.
Just days after the appellate court's second ruling, executives of Ben Cooper, Inc. announced they were moving the company to Greensboro, North Carolina. The company said at this time that it had 35 permanent employees, and manufactured and supplied more than 4 million costumes in the previous year. It said it controlled 70 to 80 percent of the licensed costume character costume business, and was partnered with companies such as Children's Television Workshop (producers of Sesame Street), DC Comics, Mattel, and Walt Disney Studios. It said the reason for the move was to be closer to Southern textile factories and cutting shops, so that it could move away from the environmentally harmful vinyl costumes it had obtained from Asia and toward more acceptable natural fabrics. The company hoped to invest $6 million ($11,262,644) in building its new Greensboro facility, and said it would apply for a $600,000 Community Development Block Grant to help defray costs and provide jobs to low-income workers in the area.
But on October 30, 1991, Ben Cooper, Inc. filed for Chapter 11 bankruptcy yet again. The company's chief executive officer said the cause of the second bankruptcy was due to relocation expenses, the early 1990s recession, and delays in obtaining bank loans. The company was not able to survive as an independent firm, however, and was bought by Rubie's Costume Co. in 1992.
Ben Cooper, Inc.