Whitehall Fails to Pay $13.5 Million Trade Debt, Considering Bankruptcy
June 18, 08
Whitehall Jewelers, Inc. has announced that it has approximately $13.5 million of trade debt. In addition, it has received default notices from Fabrikant Receivables, LLC for debts totaling $4.6 million and from Rosy Blue, Inc. for another $2 million. In addition, some of its suppliers are demanding additional or accelerated payments, leading Whitehall to consider federal bankruptcy protection. On June 11, Whitehall received a default notice from Fabrikant with respect to an unsecured note dated On the same day it also received a default notice from Rosy Blue for two unpaid debts totaling $2.16 million. Following months of talk in the market about problems at A failure to pay any amount in excess of $1 million constitutes a default under the jewelers’ senior credit agreement. As a result, Whitehall said it is facing “significant challenges in meeting its ongoing liquidity requirements,” and “actively” considering its options, including seeking protection under the federal bankruptcy code. On Friday it had about $64.5 million of outstanding borrowings under the senior credit agreement. A default may trigger a process against the collateral securing the indebtedness, which includes all of the company's assets.