The Chapter 11 trustee overseeing the bankruptcy of A. Jaffe aims for a new sale of the company’s assets in early July.
In a motion filed June 25, freshly appointed Chapter 11 trustee Richard Levin requested a new deadline of July 5 for bids for the company’s assets. If more than one qualified bid is received, an auction will be held on July 11.
The trustee will consider bids for less than A. Jaffe’s complete assets—such as part of its inventory or its intellectual property—if those bids result in higher recovery for the estate. The initial sale was for all of the company’s assets.
The Chapter 11 trustee has not yet filed a motion for the sale of the assets of related companies Firestar Diamond and Fantasy Inc., which are also in Chapter 11. Levin tells JCK he will “addressing those in the coming weeks.”
Levin, a partner at New York City law firm Jenner & Block, was appointed Chapter 11 trustee on June 14. New York bankruptcy judge Sean Lane had approved the appointment of a Chapter 11 trustee the prior week, following the collapse of the initial auction for A. Jaffe.
In May, Parag Diamonds, also known as Paramount Gems, won an auction of A. Jaffe’s assets with an $8 million bid. But at a subsequent court hearing, Lane declined to approve the sale, citing questions about the company’s valuation and a former executive’s communication with owner Nirav Modi. The debtors’ counsel eventually withdrew its sale motion.
Modi, the Indian diamond magnate who also owns Firestar Diamond and Fantasy, is accused of defrauding Punjab National Bank of $2 billion. His lawyer has denied the allegations.
Modi’s current whereabouts are unknown, though one recent report said he was living in an apartment in London, above a jewelry store that bears his name. India’s Enforcement Directorate has reportedly sought his extradition.
A. Jaffe, Firestar Diamond, and Fantasy Inc. all filed for Chapter 11 on Feb. 26, citing the disruption the charges against Modi had caused their businesses. Modi has owned A. Jaffe since 2007.
(Image courtesy of A. Jaffe)