M. Fabrikant & Sons and Fabrikant-Leer filed chapter 11 petitions, the company announced in a release Saturday.  The company said it filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code.  The company’s foreign and domestic affiliates were not included in the Chapter 11 filing.

 

The full release follows:

 

“M. Fabrikant and Fabrikant-Leer File Chapter 11 Petitions

 

New York, November, 18, 2006-

 

M. Fabrikant & Sons, Inc., (“Fabrikant” or the “Company”), the world leader of fine diamonds and jewelry, announced today that it, together with its domestic subsidiary, Fabrikant-Leer International, Ltd., filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code.  The Company’s foreign and domestic affiliates were not included in the Chapter 11 filing.

 

The Company is expected to continue to operate its business during the pendency of this Chapter 11 case as a debtor in possession under the Bankruptcy Code.  The Company expects a smooth transition into Chapter 11, with all of its facilities expected to remain open on normal schedules. 

 

Fabrikant has negotiated financing arrangements with its senior secured lenders that remain subject to court approval.  Using the Chapter 11 process, Fabrikant plans to continue to pay employee wages and benefits and to honor the customer fulfillment obligations and programs for which the Company has become so well known, and to make uninterrupted payments to suppliers for goods and services. 

 

In addition, the Company continues to actively pursue a full range of strategic alternatives, including the sale or refinancing of the firm.

 

Fabrikant believes that its Chapter 11 proceedings currently provide the best opportunity to maximize the value of its assets and its business for all stakeholders. 

 

New York-based Fabrikant enjoys an excellent reputation, dating back over four generations.  Since inception the Company has grown to become one of the world’s foremost diamond and jewelry wholesalers, and has developed a number of strategic manufacturing and distributing international affiliates. The family run and operated company plans to continue their dedication to healthy growth of the industry.  

 

Cautionary Statements

 

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding the Company's expectations concerning the bankruptcy process and the continuation of its day-to-day operations and payments to vendors and employees in the ordinary course.

 

These statements represent management's current views and are subject to risks and uncertainties that could cause actual results and events to differ materially from those expressed or implied herein. “