Friday April 20, 2007
Jeweler M. Fabrikant & Sons seeks approval to auction assets
WASHINGTON (AP) - Diamond wholesaler M. Fabrikant & Sons Inc. has asked a judge for permission to begin enticing bidders for an auction of its assets slated for early May.
The request, filed with the U.S. Bankruptcy Court in Manhattan on Tuesday, solidifies the company's earlier assertions that it may liquidate rather than reorganize.
Under the auction plan, privately held M. Fabrikant would sell all its assets, including inventory, accounts and intellectual property. It would then file a liquidation plan with the court.
Under the proposed auction rules, any stalking-horse, or lead bidder, would be offered payment for fees and costs worth up to 2 percent of the bid or $200,000 (euro147,000), if the offer is lost at auction.
The judge overseeing the jewelry company's bankruptcy case will decide whether to approve the rules at a hearing on April 26.
M. Fabrikant has been under Chapter 11 bankruptcy protection since Nov. 17 after lenders "froze'' its bank accounts. Lenders include ABN Amro Bank, Antwerpse Diamantbank, Bank of America, HSBC Bank USA, Israel Discount Bank of New York, JP Morgan Chase and Sovereign Bank. Fabrikant owed them about $161.9 million (euro119 million) as of December.
The 112-year-old New York company is one of the world's largest manufacturers and distributors of diamonds and gemstone jewelry.
M. Fabrikant & Sons owns 81 percent of domestic unit Fabrikant-Leer International Ltd., which is also in Chapter 11. Fabrikant directly and indirectly owns over 40 companies in 10 countries.-AP
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