Aaura, Inc. announced that it has filed for reorganization with the U.S. Trustee on Feb. 28. Factors that led Chicago-based wholesaler of gold to file for Chapter 11 bankruptcy protection included the recent dramatic volatility in the price of gold, the weakening of the dollar against the Euro, and a general tightening of credit in Italy, resulting from a sluggish economy there, the company said in a statement. It also mentioned “other, since-corrected issues,” that were not specified.
In conjunction with the filing, Aaura asked the court to consider a variety of “first day motions” to support its vendors, customers, and employees. These included motions seeking court permission to continue payments for employee payroll and health benefits; maintain cash management programs; and to retain legal and financial professionals to support the company’s actions. These motions were approved “under favorable terms” a few days after the filing, the company said.
Unlike most companies filing for a reorganization, Aaura said it does not anticipate the need for debtor in possession financing and projects funding itself through current operations.
Aaura said it intends to use this reorganization process “to take the actions necessary to position itself for future success.” A key ingredient is improving the customer service aspect of dealing with Aaura. Over the past four months Aaura said in its statement that it has done more to improve customer satisfaction than in the previous 15 years. The Aaura management team wishes to continue this trend. This will include improving the merchandising and hiring additional sales staff to assist its wholesale accounts.
“We are still very much in business and plan to continue the 23 years of excellence we have provided to our customers,” the company said in its statement. “The internal factors that deal with how we relate to the changes around us have been changed; this positive step will allow us the flexibility to adapt to an evolving marketplace and will result in a more positive experience for our retail partners. We have re-designed the way in which we handle certain internal processes to improve the overall flavor of the Aaura experience. And, of course, we deeply regret any adverse impact this action may have on our business partners during the time in which they will not receive payments for balances owed.”
Since filing the documents with the court, Aaura said it has resumed shipments from many of its regular vendors thereby providing its customers with an uninterrupted flow of products.