New York-based L.I.D., Ltd.,announced Friday that it has filed for protection under Chapter 11 of the Bankruptcy Code.
L.I.D.’s newly appointed chief executive officer, Lyle M. Rose told JCK that the filing was due to pressure from its banks.
“We have been trying to negotiate in good faith with the banks every time it seems it’s gong forward we ran into a situation last month they threatened a demand,” he said. “We thought everything was going fine until we had our bank account wiped out last week. I didn’t want them seizing my $80 million in inventory. We had to declare bankruptcy to protect ourselves.”
“At the moment I am stronger than I was on Friday. I don’t have this 800 pound monkey on my back making threats. The debt to the trade is under $200,000 and everybody will be paid. … We are here and we are strong and we are growing. The customer service will be there as far as I’m concerned it’s business as usual.”
In a statement, Rose said, “We had to take this action in order to protect our assets and the integrity of the business in face of what we believe to be unreasonable demands and actions taken by our bank lenders. Our business will continue substantially as it has in the past and our customers should expect no significant changes in our business, quality of our product and customer satisfaction.”
L.I.D. Ltd’s parent company in Israel is a DTC sightholder. It is the second sightholder to declare Chapter 11 in recent months. In November, M. Fabrikant and Sons filed for Chapter 11.