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Modi Latest: Three Jewelers File for Chapter 11

Firestar and Fantasy hope to find buyers within a week.
Feb 28, 2018 7:46 AM   By Rapaport News
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RAPAPORT... Three companies in Nirav Modi’s jewelry empire — A. Jaffe, Firestar Diamond, and Fantasy — have filed for bankruptcy in the US, with two of them hoping to find buyers soon.

Indian investigators are probing allegations that Modi defrauded Punjab National Bank of $1.8 billion by obtaining unauthorized loans. The total amount could be about $200 million more than that, the lender said in an update Monday.

A. Jaffe, a New York-based bridal-jewelry manufacturer, plans to restructure under Chapter 11 to preserve its operations and keep a clear separation between it and the allegations against Modi. The events in India “will in no way harm [our] brand commercially,” the company stressed in a statement Monday.

“A. Jaffe and its core team here in the US want to assure partners and customers that A. Jaffe is not in any way involved with any of the alleged conduct that is the subject of the accusations,” the company said. The company’s liabilities are between $10 million and $50 million, according to the Chapter 11 filing it submitted the same day.

Firestar and Fantasy, which both manufacture jewelry, filed for Chapter 11 protection to ensure stability of their operations and find a buyer quickly, they explained in a statement Tuesday. The companies expect to agree on a sale to one or more companies in the next week.

“The filings are a result of acute operational challenges that the companies experienced when their supply chain was significantly disrupted,” the statement continued.

Firestar listed liabilities of $50 million to $100 million, while Fantasy’s estimate stood at $1 million to $10 million.
Tags: A.Jaffe, chapter 11, fantasy, firestar diamond, Modi, new york, Nirav Modi, Rapaport News, US
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