WASHINGTON: A US courtroom on Friday handed an meantime order that stops collectors from amassing debt from Nirav Modi-owned Firestar Diamond Inc which early this week filed for bankruptcy.
Modi, who is being investigated for unlawful transfer of over Rs 12,000 crore from Punjab National Bank, has a majority stake in Firestar Diamond and its different sister companies thru his different companies.
Firestar Diamond Inc filed the Chapter 11 voluntary petition within the New York Southern Bankruptcy Court on Monday.
Entering an order for relief, the US bankruptcy courtroom within the Southern District of New York stated that the submitting of case imposed an automated stay in opposition to most assortment activities.
"This means that creditors generally may not take action to collect debts from the debtor or the debtor's property," the bankruptcy courtroom stated in its two-page order.
"For example, while the stay is in effect, creditors cannot sue, assert a deficiency, repossess property, or otherwise try to collect from the debtor. Creditors cannot demand repayment from the debtor by mail, phone, or otherwise," it stated.
"Creditors who violate the stay can be required to pay actual and punitive damages and attorneys fees," the courtroom warned within the order, copies of which were transmitted to multiple stake holders, including a few dozen collectors of Firestar Diamond Inc.
A gathering of the collectors has been convened via the courtroom in New York on March 30.
The meantime relief comes days after Mihir Bhansali had filed for bankruptcy on behalf of 3 companies - Fantasy Diamond Inc, Fantasy Inc, and A. Jaffe Inc, of which he is the president and sole director.
In a courtroom submission on Wednesday, Firestar Diamond Inc (FDI) had supplied an inventory of its collectors along side their main points.
According to courtroom papers, FDI and Fantasy recently have jewelry merchandise on consignment with their customers having an mixture consignment value price of roughly $33,250,000 million.
AJI recently has jewelry merchandise on consignment with its customers having an mixture consignment value price of roughly $7,300,000.
Bhansali stated that all the way through the pendency of those instances, it is its purpose to proceed to operate their companies while in quest of an infusion of capital or the sale of its companies, in entire or in parts, as a going concern.
"The Debtors expect that the Chapter 11 process will add a sense of order, alleviate some of the concerns expressed by vendors and customers and create a forum in which potential purchasers for all or some of the businesses are willing to participate," he stated.
According to courtroom papers, Firestar Diamond and Fantasy have approximately $90 million of annual gross sales to one of the crucial most well-known and well-regarded primary division stores, primary speciality stores chains, wholesale clubs, and United States armed services and products bases.
Their accounts come with Zales, Kays, Jareds, COSTCO, Sams Club, Macys, JC Penney, and US Navy.
Modi, who is being investigated for unlawful transfer of over Rs 12,000 crore from Punjab National Bank, has a majority stake in Firestar Diamond and its different sister companies thru his different companies.
Firestar Diamond Inc filed the Chapter 11 voluntary petition within the New York Southern Bankruptcy Court on Monday.
Entering an order for relief, the US bankruptcy courtroom within the Southern District of New York stated that the submitting of case imposed an automated stay in opposition to most assortment activities.
"This means that creditors generally may not take action to collect debts from the debtor or the debtor's property," the bankruptcy courtroom stated in its two-page order.
"For example, while the stay is in effect, creditors cannot sue, assert a deficiency, repossess property, or otherwise try to collect from the debtor. Creditors cannot demand repayment from the debtor by mail, phone, or otherwise," it stated.
"Creditors who violate the stay can be required to pay actual and punitive damages and attorneys fees," the courtroom warned within the order, copies of which were transmitted to multiple stake holders, including a few dozen collectors of Firestar Diamond Inc.
A gathering of the collectors has been convened via the courtroom in New York on March 30.
The meantime relief comes days after Mihir Bhansali had filed for bankruptcy on behalf of 3 companies - Fantasy Diamond Inc, Fantasy Inc, and A. Jaffe Inc, of which he is the president and sole director.
In a courtroom submission on Wednesday, Firestar Diamond Inc (FDI) had supplied an inventory of its collectors along side their main points.
According to courtroom papers, FDI and Fantasy recently have jewelry merchandise on consignment with their customers having an mixture consignment value price of roughly $33,250,000 million.
AJI recently has jewelry merchandise on consignment with its customers having an mixture consignment value price of roughly $7,300,000.
Bhansali stated that all the way through the pendency of those instances, it is its purpose to proceed to operate their companies while in quest of an infusion of capital or the sale of its companies, in entire or in parts, as a going concern.
"The Debtors expect that the Chapter 11 process will add a sense of order, alleviate some of the concerns expressed by vendors and customers and create a forum in which potential purchasers for all or some of the businesses are willing to participate," he stated.
According to courtroom papers, Firestar Diamond and Fantasy have approximately $90 million of annual gross sales to one of the crucial most well-known and well-regarded primary division stores, primary speciality stores chains, wholesale clubs, and United States armed services and products bases.
Their accounts come with Zales, Kays, Jareds, COSTCO, Sams Club, Macys, JC Penney, and US Navy.
US court grants interim stay on debt collection against Nirav Modi's firm
![US court grants interim stay on debt collection against Nirav Modi's firm]()
Reviewed by Kailash
on
March 02, 2018
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