Fortunoff enters ‘Chapter 22’
Staff Staff -- Home Textiles Today, February 5, 2009
Uniondale, N.Y. – Upscale jewelry and home furnishings specialty retailer Fortunoff today filed for Chapter 11 bankruptcy protection – exactly one year and one day since its first Chapter 11, on Feb. 4, 2008.
Last year’s bankruptcy was a “pre-packaged” deal, wherein investment firm NRDC Equity cleaned up Fortunoff’s books and brought it out of bankruptcy in March 2008 – looking to expand parts of its format beyond its existing retail base by opening new outdoor-furniture stores, as well as new, Fortunoff-branded home and jewelry departments in Lord & Taylor, another NRDC property. In fact, Lord & Taylor at that time proffered a $10 million letter of credit “in conjunction with Fortunoff’s bankruptcy filing” last year, the company said.
Today’s filing, by Fortunoff Holdings, LLC and Fortunoff Card Co., LLC in the United States Bankruptcy Court, Southern District of New York, listed the 30 largest creditors, including Croscill Curtain Co., ranked No.13 with an estimated claim of $477,950.
In court documents, Fortunoff estimated that 1,000 to 5,000 creditors would be eligible for funds to be distributed to unsecured creditors. It pegged its estimated assets at $100 million to $500 million and estimated liabilities at $100 million to $500 million.
The documents also state that Fortunoff “incurred net operating losses of approximately $42.2 million on revenues of approximately $260.1 million” in the nine months ending Nov. 30, 2008.
In its filing, Fortunoff cites a “severe liquidity crisis that began in January 2009” with vendors tightening up on credit.
The documents also state that Fortunoff, along with Wells Fargo, “as agent for the pre-petition lenders,” and its financial advisor Zolfo Cooper, LLC, “began a full and robust marketing of their business” around the end of 2008. The filing goes on to state that Fortunoff has in recent weeks met with “numerous potential buyers, investors and partners” – but that the company lacks the “necessary liquidity to continue to operate outside of bankruptcy.”
If unsuccessful in finding an overall buyer, Fortunoff states, then it will seek to wind down and liquidate the business.
Fortunoff president and ceo Charles Chinni said, “The jewelry and home goods businesses have been hit particularly hard by the economic downturn. However, we are actively seeking a buyer for the business, and we will continue to do so in the Chapter 11 process.”
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