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Samuels Jewelers Files for Bankruptcy

Aug 8, 2018 8:28 AM   By Rapaport News
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RAPAPORT... Alleged Indian fraudster Mehul Choksi’s US jewelry chain has filed for Chapter 11 protection, according to court papers.

Samuels Jewelers has brought in liquidators to begin selling its assets so it can pay off debt, the Tuesday filing at the District of Delaware Bankruptcy Court showed. The company listed liabilities between $100 million and $500 million, including $84 million to Wells Fargo Bank and $10 million to GB Credit Partners. In all, the jeweler has more than 200 creditors.

The retail chain, which Choksi’s Gitanjali Gems owns, will close more than 100 of its 120-plus stores, according to the Wall Street Journal.

Indian authorities are searching for Choksi and his nephew, jeweler Nirav Modi, in connection with an alleged $2 billion bank fraud against the country’s Punjab National Bank. They both fled the country, with Choksi currently living in Antigua and Barbuda, according to reports citing his lawyer.

Various companies have bought assets belonging to Modi’s US jewelry businesses, which filed for Chapter 11 earlier this year. Paramount Jewels bought A. Jaffe, while Unique Designs acquired Fantasy’s inventory. Liquidators are trying to save the Samuels chain from complete closure.

This is not the first time Samuels has sought court protection, according to the filing. The retailer’s former owner, Barry’s Jewelers, filed for bankruptcy in 1992 before resuming profitability. In 1997, Barry’s once again sought Chapter 11 protection. In 1998, the company changed its name to Samuels Jewelers, moved its corporate headquarters from California to Texas, and sold a majority stake to DDJ Capital Management. The firm went through bankruptcy a fourth time in 2003, before Gitanjali acquired it in 2006.

Image: Samuels Jewelers
Tags: a. jaffe, Barry’s Jewelers, chapter 11, DDJ Capital Management, Fantasy Inc., Firestar Diamonds, Gitanjali Gems, Mehul Choksi, Nirav Modi, Paramount, Punjab National Bank, Rapaport News, samuels jewelers, Unique Designs
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