Whitehall Jewelers Goes Chapter 11;  July.2008

Looks for Buyers

373-store Whitehall Jewelers, one of the largest retail jewelers in America, recently filed for Chapter 11 protection.

According to the Chicago Tribune, the company’s $80 million financing package requires it to put its assets on the auction block.

Whitehall, which recently acquired 78 stores from Friedman Jewelers in Chapter 11 proceedings, asked the bankruptcy court for permission to hold an auction on July 16, at which it will consider "all alternatives regarding a disposition of substantially all of the assets." Whitehall said such options include selling all or a portion of its business as a going concern or selling the rights to liquidate its inventory, the Tribune said.

Whitehall said, after defaulting on a $125 million from LaSalle Bank, it "could no longer sustain viable business operations or obtain necessary financing without resorting" to Chapter 11 protection.

The company was founded in 1895 as Marks Brothers Jewelers.

A list of the companies that are on the top creditors list show that many big Indian companies are owed millions of dollars. It will be interesting to see if this bankruptcy has a ripple effect throughout the trade. v