Samuels Jewelers Files for Bankruptcy

RAPAPORT... Alleged Indian fraudster Mehul Choksi's US jewelry chain hasfiled for Chapter 11 protection, according to court papers. Samuels Jewelers has brought in liquidators to begin sellingits assets so it can pay off debt, theTuesday filing at the District of Delaware Bankruptcy Court showed. The company listed liabilities between $100 million and $500 million, including $84 million to Wells Fargo Bank and $10 million to GBCredit Partners. In all, the jeweler has more than 200 creditors. The retail chain, which Choksi's Gitanjali Gems owns, willclose more than 100 of its 120-plus stores, according to the Wall StreetJournal. Indian authorities are searching for Choksi and his nephew,jeweler Nirav Modi, in connection with an alleged $2 billion bank fraud againstthe country's Punjab National Bank. They both fled the country, with Choksi currentlyliving in Antigua and Barbuda, according to reports citing his lawyer. Various companies have bought assets belonging to Modi's US jewelry businesses, which filed for Chapter 11 earlier this year. Paramount Jewels bought A. Jaffe, while Unique Designs acquired Fantasy's inventory. Liquidators aretrying to save the Samuels chain from complete closure. This is not the first time Samuels has sought court protection, according to the filing. The retailer's former owner, Barry'sJewelers, filed for bankruptcy in 1992 before resuming profitability. In 1997, Barry's once again sought Chapter 11 protection. In 1998, the company changedits name to Samuels Jewelers, moved its corporate headquarters from Californiato Texas, and sold a majority stake to DDJ Capital Management. The firm wentthrough bankruptcy a fourth time in 2003, before Gitanjali acquired it in 2006. Image: Samuels Jewelers