Lugano Diamonds & Jewelry Inc., a troubled Newport Beach jeweler, announced it has voluntarily filed for chapter 11 relief in the U.S. Bankruptcy Court for the District of Delaware “to facilitate a value-maximizing sale transaction.”
The company reached an agreement with Enhanced Retail Funding, an investment firm in the jewelry sector. The proposed transaction remains subject to higher and better offers and other customary conditions, Lugano said in a statement.
To fund operations during the chapter 11 cases, Lugano has filed a motion seeking approval of a $12 million debtor-in-possession financing facility that could provide up to approximately $10 million of new liquidity to Lugano.
Lugano said it continues to operate in the ordinary course of business at this time.
Lugano founder and Chief Executive Moti Ferder resigned earlier this year amid accusations of financial irregularities.
Lugano is a unit of Compass Diversified, which said in a separate statement that the jeweler will no longer be included in its quarterly results (NYSE: CODI).
For more information, see the Nov. 24th issue of the Business Journal.
