Luxury jeweler Lugano Diamonds & Jewelry Inc. secured the green light to tap up to $1.5 million of a larger $12 million Chapter 11 financing package as it launches a desperate search for a buyer during the peak holiday shopping frenzy.
A Delaware bankruptcy court on Tuesday issued interim approval for the debtor-in-possession funding, supplied by majority owner and prepetition lender Compass Group Diversified Holdings LLC. The ruling came during a tense first-day hearing in Wilmington.
“In the absence of this relief, the reorganization effort would suffer the risk of immediate and irreparable harm,” said U.S. Bankruptcy Judge Brendan L. Shannon, granting the interim order.
A High-End Liquidation Unlike Any Other
Judge Shannon also signed off on an interim agency-sale partnership with Enhanced Retail Funding LLC, an affiliate of Gordon Brothers, signaling that Lugano’s dazzling inventory—diamonds, fine jewelry, and luxurious display fixtures—will begin moving quickly.
According to court filings, ERF will immediately take charge of selling Lugano’s merchandise, furniture, fixtures, and equipment.
ERF’s attorney, Steven Fox of Riemer & Braunstein LLP, stressed that this will not resemble a bargain-bin retail collapse.
“We’re not going out there with sandwich boards or bikini-clad women waving ‘going out of business’ signs,” he told the court. “This is a completely different population of inventory—and a very different client base.”
