Market NewsCommentFriedman's bankruptcy sought - media

Friedman's bankruptcy sought - media

A group of jewellery sellers owed $9.1 million from Friedman's Inc. are trying to force the company into Chapter 7 bankruptcy - the retailer's second trip to bankruptcy court in just over three years, The Associated Press reported. Three New York-based jewellery firms - including the US arm of India's Rosy Blue Group - filed the involuntary Chapter 7 petition against Friedman's on Tuesday in US Bankruptcy Court in Wilmington, Del., the report said. According to court papers, Friedman's owes two Rosy Blue affiliates about $6.3 million. The company also owes Paul Winston-Eurostar LLC $1.9 million and two affiliates of Jay Gems Inc. about $950,000. It said the creditors are seeking to push Friedman's into Chapter 7 liquidation. Unlike Chapter 11, whereby a company reorganizes under a bankruptcy court's supervision, in Chapter 7 a trustee is appointed to liquidate a company's assets. Under bankruptcy law, Friedman's has 20 days to respond to the involuntary Chapter 7 petition. Among its options, the company could seek to contest the bankruptcy or have the case converted to reorganization under Chapter 11 of the Bankruptcy Code.

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