Noting that it has already defaulted on its latest credit agreement, Finlay said in its latest filing that there were “substantial doubt[s]” about its “ability to continue as a going concern.”

“We experienced a significant operating loss in 2008 and are expected to have an operating loss in 2009,” the company said. “We are in default of certain covenants under the Revolving Credit Agreement. … If we cannot resolve some or all of these factors, we may be unable to maintain a level of liquidity necessary to continue to operate our business.”

Finlay posted a loss of $107.3 million for 2008. The company already announced a major reorganization in February, which involved exiting its long-standing leased department business and forming a chain of high-end stores from the Bailey, Banks and Biddle; Carlyle; and Congress Jewelers chains.

The 108-store chain also said it was closing approximately half of its stores—more than the 40 it originally announced.