Court to Adamas: Close Carlyle Deal

Adamas Partners cannot back out of its plan to buy 14 Carlyle and Co. stores following liquidation of jewelry retailer Finlay Enterprises, ruled the U.S. Bankruptcy Court for the Southern District of New York.

In February, Russell Cohen, a member of Carlyle’s founding family and the driving force behind Adamas, told associates via e-mail he would not buy the stores since an unnamed vendor had withdrawn its support. (See “The Scoop,” JCK, May 2010.) Finlay’s bankruptcy trustee went to court to force Adamas to complete the buy.

The court agreed, and ordered Adamas to reimburse Finlay’s legal fees and pay $733,766. (However, getting money out of Adamas won’t be easy; legal filings called it a “shell corporation with no meaningful assets.”)

Cohen’s legal team responded with a statement asking why the “debtors did not pursue a closing of the next highest bidder’s offers.… The debtors took no action to mitigate damages for many weeks after learning that the original sales would not be concluded.”