Carlyle Plan Abandoned?

There has been a lot of talk that Adamas and Russell Cohen have either abandoned or scaled back their plan to re-open 14 Carlyle stores.  Yesterday, the remains of Finlay filed a motion “to compel Adamas Partners and Russell L. Cohen to comply with [the court’s] sale orders.”

Some quotes from the legal papers:

On November 23, 2009, the Court entered an order … unconditionally obligating Adamas  to purchase, among other things: (i) lease designation rights for fourteen of the Debtors’ retail locations and the Carlyle service center (the “Service Center”) in Greensboro, North Carolina; (ii) the furniture, fixtures and equipment located in each of those locations; and (iii) Carlyle’s intellectual property and information technology ….

In the three months following the entry of the November Sale Order, the Debtors and their professionals have made countless attempts to bring Mr. Cohen to consummate his unconditional obligations to these estates. At every juncture, however, Mr. Cohen and his advisors either ignored the Debtors’ requests, or flatly refused to honor the unconditional and explicit terms of the Sale Orders, while throwing up new and irrelevant obstacles in an effort to avoid their obligations to close.

On February 22, 2010, counsel for Adamas informed the Debtors that one of the vendors it had hoped would participate in its business has determined not to proceed, and therefore Mr. Cohen had decided to abandon any efforts to comply with this Court’s Sale Orders.

 UPDATE: On February 22, Adamas/Cohen sent out this message to “customers, associates, investors and other business partners”:

Shortly after [Finlay’s Chapter 11] filing, I formed Adamas Partners LLC to resurrect and continue the business conducted by our family before the Finlay acquisition, albeit on a scaled-down basis. That process has proved extraordinarily difficult, representing unexpected challenges on almost a daily basis. Yet we persevered, assembling an impressive group of long-time trusted store and home office associates, renewing ties with key vendors, attracting new investors who shared our vision, and forging a new banking relationship to support the new business.

An unexpected event in the last several days that was completely beyond our control has thrown up a last-minute roadblock that is impossible to get around. A key vendor, and one with whom we shared a special relationship over several decades, has decided to pursue a different direction. In addition, the bankruptcy process, which has been somewhat unpredictable, now presents with deadlines that, when coupled with our key vendor’s new plans, make it impossible to prelaunch the chain out of bankruptcy.

I may never give up on the goal of operating once again a guild jeweler with superior associates providing superior service to a very loyal group of customers.

JCK News Director