Luxury jeweler Lugano Diamonds & Jewelry Inc. has entered the legal and financial battlefield, filing for Chapter 11 protection in Delaware as it seeks to restructure towering debts and secure a buyer. The company, known for handcrafted gems worn by elite clients, now faces liabilities estimated between $500 million and $1 billion—a weight heavy enough to sink even the most polished diamonds.
A High-Stakes Gamble With a Stalking Horse Bid
In a late Sunday announcement, Lugano revealed that it—along with several affiliates—initiated bankruptcy proceedings to pursue a full asset sale, supported by a stalking horse bid from investment firm Enhanced Retail Funding. Acting like the first brave bidder at a high-stakes auction, the stalking horse offer is intended to set the baseline and attract competing suitors.
The company also secured a $12 million debtor-in-possession financing package, a crucial lifeline designed to keep operations running while a sale unfolds.
Assets, Liabilities, and the Mounting Financial Load
According to the bankruptcy petition filed Sunday, Lugano listed assets of $100 million to $500 million, significantly overshadowed by liabilities of $500 million to $1 billion. The declaration shows a layered financial structure:
