Following its Feb. 4 bankruptcy filing, the fate of Brodkey’s Jewelers remains up in the air, chief executive officer Oliver Keene tells JCK.
“We have as many as 15 different people who are looking at the business,” he says. “Some are ‘going concern’ bids, some are liquidators. There are still people coming in.”
A “going concern” bid would keep the company alive, and courts generally favor them over liquidators. The final auction is set for March, reports say.
“We have a reasonable number of going concern [possibilities],” Keene says. “They are looking at it for different reasons. Some see it as a new business opportunity.”
Fifty-three-store chain Riddle’s Jewelry had looked into buying nine-store Brodkey’s prior to its filing, but ultimately backed out. Executives don’t know if they will try a second time.
“We are not sure,” says David A. Westergaard, Riddle’s executive vice president, CFO, and treasurer, when asked if the company would bid again.
Westergaard says there are reasons why it would want to buy the company—particularly “geographic similarities.” But he would not comment on why the company dropped its initial bid.
At press time, the listed stalking horse bidder was Buxbaum Jewelry Advisors, which would liquidate the company. However, Keene says that a new stalking horse, also a liquidator, could replace it.
Keene notes the 133-year-old company had been in trouble for some time, but after his arrival as CEO last year, the company, its vendors, and banks had worked out an out-of-court restructuring deal designed to save the company. But one unexpected factor that torpedoed the deal, according to both Keene and a company creditor, was Hurricane Sandy. The settlement required inventory to be delivered at a certain time, and Sandy closed many East Coast offices, delaying the shipments.
“All the merchandise did not arrive by [November] 9,” he says. “When that happened, the bank declared a default.”