COURT GIVES CRYSTAL BRANDS OK ON $77.7M SALE OF JEWELRY UNIT
Byline: Jeff Siegel
NEW YORK — Crystal Brands Inc. received bankruptcy court approval Friday for the $77.7 million sale of its jewelry operations to CBJG Acquisition Corp.
Alan Miller, of Weil, Gotshal & Manges, counsel to Crystal Brands, said the jewelry unit, which makes costume jewelry under the Monet, Trifari and Marvella brand names, attracted just the one bid at an auction Thursday.
Miller said the division, which has annual sales of about $150 million, was “very unprofitable” for the two years leading up to the firm’s Chapter 11 filing in January, but “has turned the corner since then.”
The closing of the sale is expected by Nov. 30.
Also at Friday’s hearing, Crystal Brands and its unsecured creditors moved closer to an agreement on the value of the secured creditors’ claims.
Miller said Crystal Brands’ secured lenders have agreed to reduce the estimated value of their claims to $143 million from $160 million. He said an amended disclosure statement containing the new valuation would be filed with the court.
News of the cut in the banks’ claims was greeted with caution by Thomas Maloney, counsel to Crystal Brands’ unsecured creditors.
“They’re moving in the right direction, but [the valuation] has to move more,” said Maloney, of Cleary, Gottlieb, Steen & Hamilton, whose group estimates the value of secured claims at about $110 million.
A hearing on the value of the secured creditors’ claim is scheduled for Tuesday, the same day as the hearing to approve Crystal Brands’ disclosure statement.
Theodore Gwertz, of Wachtell, Lipton, Rosen & Katz, representing secured creditors, tried to have the hearing put off for a few weeks, but Bankruptcy Judge Prudence Abram refused, saying she wanted to keep the case on a “fast track.”
At the last disclosure statement hearing, Abram lambasted the filing for its vagueness and for neglecting unsecured creditors.
— Fairchild News Service