Urgent Call to Finlay Jewelers Trade Vendors
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01.03.09, 08:00
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Retail
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Following the recent rumors circulating about the financial situation of Finlay fine jewelers in the USA (owners of jewelry chains such as Bailey Banks & Biddle), here follows a report regarding very important developments:
There is a very real possibility of Finlay fine jewelers filing for bankruptcy, which could leave debt in the 100's of millions. The fine jewelry company is currently conducting last minute negotiations with their two large creditors, Equity firms GECC and Harbinger (which together have over $520 million in secured loans to Finlay).
In December 2008, Finlay's trade debt was only about $40 million, placing the company’s survival in the hands of the two bondholders who have secured liens on the company's assets.
These two companies have expressed their willingness to work to prevent the bankruptcy of Finlay fine jewelers - but only if the trade vendors (suppliers of diamonds, etc.) sign-up to the plan, and agree to accept delayed payments - with the aim of giving Finlay "breathing room" to survive up to at least August 2009. Otherwise, this may be the straw that breaks the camel's back, and Finlay will possibly file for Chapter 11 in a matter of days.
Israeli diamantaires who trade with Finlay should be aware that the current issue will last only several more days during which time either many diamantaires will sign the agreement and "secure" their invoices with Finlay - or else Finlay fine jewelers will go bankrupt. After this time, any diamantaire who is owed money by Finlay and has not signed the agreement may not receive any payment.
The proposal, which has been formulated by lawyers handling the case, has been stated as follows: "Finlay is circulating a Secured Vendor Acceptance and Agreement to vendors. If vendors up to $25 mm claims sign (and Finlay only accepting $25mm), Finlay will not file Chapter 11 tomorrow. Agreement provides that vendors will participate in 3rd line for current receivables and will be paid 20% in 5 days, 10% in 90 days, 10% in 120 days and 10% in 150 days and 50% in 180 days.”
Vendors who have not received agreement are requested to call Bruce Zurlnick at 212-808-2832.
Israeli diamantaires seeking further information or assistance in this matter may contact IDI New York at 212-938-0888.
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By: Steven Silverstein, CEO IDI NY
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