The final purchase price for the assets of A. Jaffe was $8 million, far below the brand’s original appraised value of $22.8 million, court papers show.
Parag Diamonds, also known as Paramount Gems, won the May 3 auction for the company’s assets, held as part of the Chapter 11 process. The sale price had previously not been disclosed.
A New York bankruptcy court judge is due to rule on the sale at a court hearing today.
A motion from the debtor’s counsel, Ian Winters, said that no all-asset bids had been received by the deadline for related companies Firestar Diamond and Fantasy Inc., also in Chapter 11. That prompted both of those sales to be postponed.
“However, it is noteworthy that the Debtors have since received six informal bids for various assets related to certain business segments of Fantasy/Firestar, with multiple bids received with respect to certain of those business segments,” Winters said.
He said that a sale of those two companies’ assets may take place later in the month.
In legal filings, the government of India termed the result of the A. Jaffe auction “disappointing,” and Punjab National Bank (PNB) complained the auction significantly undervalues the company.
However in a motion in response, the company’s chief restructuring officer Mark Samson admitted that A. Jaffe probably would have fetched a higher price if there had not been allegations that A. Jaffe’s former owner Nirav Modi defrauded PNB.
“A. Jaffe cannot change those circumstances or the current environment,” he argued.
In a declaration, Parag Diamonds owner Panna Jain disclosed that company manager Anurag Jain is married to the sister of Sumay Bhansali, who is the CEO of A. Jaffe.
But Jain’s declaration added that, to his knowledge, no one at his company “had [any] direct or indirect communication with Nirav Modi or any persons or entities related to him.”
PNB and the government of India have argued that the Fantasy and Firestar sales should be postponed, pending a report from a court-appointed examiner who is auditing the companies’ books.
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