LID Files for Chapter 11

By Staff -- JCK Online, 5/1/2007 2:00:00 AM

New York–based LID recently filed for protection under Chapter 11 of the Bankruptcy Code.

LID Ltd.'s parent company is a Diamond Trading Company sightholder in Israel. It is the second sightholder-related company to declare Chapter 11 in recent months. In November, M. Fabrikant and Sons filed for Chapter 11.

The company's bankruptcy papers list $157.8 million in assets and $143.9 million in debts, reports say. Chief executive officer Lyle Rose tells JCK that the company owes trade creditors less than $300,000. Its biggest debt is to its bank lenders, to whom it owes more than $40 million.

In fact, it was banks that forced the filing, Rose says. “We have been trying to negotiate in good faith with the banks, and every time it seems it's going forward they had a new demand,” he says. “We thought everything was going fine until we had our bank account wiped out. I didn't want them seizing my $80 million in inventory and selling it for $8 million. We had to declare bankruptcy to protect ourselves.”

He adds, “At the moment I am stronger than I was [before declaring Chapter 11].I don't have this 800-pound monkey on my back making threats. … We are here and we are strong and we are growing. The customer service will be there, and, as far as I'm concerned, it's business as usual. We still have our factory in India, and we are still producing. … Chapter 11 is not bankruptcy. Chapter 11 means protection from unreasonable people. We are anything but bankrupt.”