Fabrikant Cites Nearly $400 Million in Debt in Petition

M. Fabrikant and Sons, which filed for Chapter 11 bankruptcy protection this weekend, has $366.3 million in total liabilities, court papers say. Total current assets are listed as $225.8 million.
 
The company cited numerous factors for its widely expected action, particularly the bankruptcies of two of its largest retail customers, Friedman’s and Crescent Jewelers, which it says led to “substantial write-offs, reduce sales and cash flow”; the financial resturcturing of a third customer, Whitehall Jewelers; as well as a significant reduction in purchases by Walmart as itsold through over-inventoried positions from prior years. It also cited “gold prices and diminished free cash flow.”
 
Most of the company’s debt — $161.9 million — is to its banks. Debts to third party creditors total $36 million, and amounts to non-debtor Fabrikant subsidiaries is $124 million.
 
Banks comprise the top slots on the company’s list of unsecured creditors. ABN AMRO is the leading unsecured creditor, owed $13.5 million, followed by Antwerp Diamond Bank ($8.8 million) and Union Bank ($7.8 million.) The top trade unsecured creditor is H. Dika and Co ($5.6 million) as well as Blue Star ($5.5 million), which has commenced litigation against Fabrikant.
 
The company’s secured creditors include ABN Amro ($44 million) and JP Morgan Chase. ($35.8 million.)
 
For subsidiary Fabrikant Leer, which also went Chapter 11, the largest unsecured creditor is Vaishali Diamond Corp, which is owed $2 million.