Aaura, a Chicago-based wholesaler of gold jewelry, filed for Chapter 11 reorganization on Feb. 28.
In a statement, the company said the filing was caused by the recent dramatic volatility in the price of gold; the weakening of the dollar against the euro; and a general tightening of credit in Italy, resulting from a sluggish economy there. It also mentioned “other, since-corrected, issues,” which were not specified.
In conjunction with the filing, Aaura asked the court to consider a variety of “first-day motions” to support its vendors, customers, and employees. These included motions seeking court permission to continue payments for employee payroll and health benefits; maintain cash management programs; and retain legal and financial professionals to support the company’s actions. These motions were approved “under favorable terms” a few days after the filing, the company said.
Aaura said it does not anticipate the need for debtor-in-possession financing, projects funding itself through current operations, and has resumed shipments from many of its regular vendors.
Aaura’s top 20 unsecured creditors are all Italian companies, with Viera SpA ($270,000) and Società Italiana Lavorazione ($208,000) topping the list.
“We are still very much in business,” the company said in its statement. “The internal factors that deal with how we relate to the changes around us have been changed. … We deeply regret any adverse impact this action may have on our business partners during the time in which they will not receive payments for balances owed.”