Whitehall Asks Court to Approve Liquidators

Rob Bates, Senior Editor

By JCK Online Staff -- JCK Online, 8/7/2008 2:44:00 PM

Whitehall Jewelers has asked the court to approve its choice of a trio of liquidators–Great American, Hudson Capital Partners, and Silverman Consultants–to conduct “going out of business sales.”

“The Debtors [Whitehall] have decided to monetize their remaining assets by conducting store closing sales,” its papers said. “The Debtors believe it is in the best interest of the creditors and their estates … to commence Store Closing Sales as expeditiously as practicable.”

At press time, it appeared that not every store will close, but some will be sold. In an email to Whitehall’s managers Monday, then-chief executive officer Mike Don said the company has received “indications of interest for groups of stores [as going concerns] which may total over half of our stores.” However, the court papers list only 17 stores as “potential going concern” sales. Those stores–15 in Illinois, two in Missouri–are being sought by New Zealand retailer Michael Hill, sources said.

Other “going concern” sales are possible under the agreement, and it remains to be seen whether other companies mention as possible buyers–particularly Gitanjali, owner of Samuels–will buy any of the remaining stores.

Whitehall’s papers note that the three liquidators conducted Friedman’s “going out of business” sales, which it calls “very successful.”

Possibly complicating things is a motion from Gordon Brothers, also a liquidator, which in court papers describes itself as the high bidder at last week’s auction, and says it was “shocked” and “outraged” at Whitehall “having decided at the 11th hour to switch gears” and accept the bid from the three other companies.

Whitehall Jewelers operates 373 retail stores located in 39 states, including 78 retail locations that were acquired in April 2008 from Friedman’s. It has 2,800 employees. It was originally founded in 1895 under the name Marks Bros. Jewelers.