Creditors seek bankruptcy for Friedman's
January 24, 2008
Wilmington, Del.—A group of jewelry companies owed $9.1 million by
Friedman's Inc. are trying to force the company into Chapter 7 bankruptcy,
The Associated Press reported.
Three New York-based jewelry sellers—including the U.S. arm of India's Rosy Blue—filed the involuntary petition on Tuesday in U.S. Bankruptcy Court in Wilmington, Del.
According to the
AP, court papers show that Friedman's owes two affiliates of Rosy Blue about $6.3 million, $0.19 million to Paul Winston-Eurostar LLC and about $950,000 to two affiliates of Jay Gems Inc.
The companies owed money want Friedman's to go into Chapter 7 liquidation.
In Chapter 7, a trustee is appointed to liquidate the company's assets, unlike Chapter 11, where the company can restructure under supervision of a bankruptcy court.
According to the
AP, bankruptcy law dictates that Friedman's has 20 days to respond to the petition.
The Addison, Texas-based jewelry chain could contest the bankruptcy or have the case converted to a Chapter 11 reorganization.
This isn't Friedman's first trip to U.S. Bankruptcy Court. The company emerged from Chapter 11 in late 2005.
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