Friedman's files for Chapter 11

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Friedman's files for Chapter 11

January 28, 2008

Wilmington, Del.—A week after a group of Friedman's creditors filed a lawsuit alleging that the company owes them millions, the Addison, Texas-based jeweler has filed for Chapter 11 bankruptcy protection, a move that will allow the company to restructure itself without the threat of creditors' lawsuits.

A group of three New York-based jewelry companies who say they are owed about $9.1 million by Friedman's, tried to force the company into Chapter 7, according to court papers filed on Jan. 22 in the U.S. Bankruptcy Court in Delaware.

Court papers show that Friedman's owes two affiliates of Rosy Blue about $6.26 million, $1.87 million to Paul Winston-Eurostar LLC, $479.3 million to Jay Gems and about $469.5 million to Simply Diamonds.

Since the petition, court papers say the company continued to operate its business and manage its property in the ordinary course of business.

Friedman's also sought Chapter 11 protection in 2005, but re-emerged when its bankruptcy-reorganization plan became effective on Dec. 9, 2005.

Friedman's operates 388 stores in 19 states and employs more than 2,890 staffers as of the date of the court filing, court papers say.

Editor's note: For earlier developments in this story, see Creditors seek bankruptcy for Friedman's.

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Business | Company Activities and Information | Company Bankruptcies

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