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LID assets expected to be auctioned off in May

By Michelle Graff
April 14, 2008

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New York—The New York office of diamond jewelry manufacturer LID Ltd. will sell its assets in an auction, according to the company's court-appointed chief restructuring officer.

LID CRO Chris Ellis of Consensus Advisors said the U.S. Bankruptcy Court for the Southern District of New York would oversee the auction, officially termed a "363 sale."

When asked if LID was permanently closing, Ellis said he would "never say never," but that the plan at this point is to liquidate the company's assets and pay its creditors.

Ellis said on Monday that he expects to file a motion this afternoon or tomorrow asking to hold the auction in the first half of May.

LID's New York office filed for Chapter 11 bankruptcy protection in March 2007.

Court papers show that LID defaulted on its initial payments to Bank Leumi USA, AMRO Bank NV, Sovereign Bank and New England and HSBC Bank U.S.A., giving the lenders "immediate possession and control over all of the debtor's assets," but that the lenders are opting for LID to liquidate its collateral through "one or more" court-supervised sales.

LID New York's parent company, LID Israel, has been operating under a court-appointed receiver since earlier this year.

In February, LID's New York office issued a news release stating that operations for the company, which was slated to emerge from bankruptcy later this year, would not be impacted by the financial troubles of its Israeli counterpart.
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