July 20, 2008
Kelley Drye recently concluded its representation of the Official Committee of Unsecured Creditors of Four Points Corporation d/b/a Brendan Jewelers, J.C. Keepsake Diamonds and Only Diamonds.
Four Points is a personal jewelry retailer that operated approximately 29 retail outlets in the Mid and Southwest. Less than eight months after filing for bankruptcy, Four Points emerged last month with 15 stores. The reorganization is particularly noteworthy in light of the strong liquidation trend in retail jeweler bankruptcies.
The highly contested case juxtaposed the interests of the debtor, its principal, its lender (Union Bank of Israel Ltd.) and the Committee. Kelley Drye was instrumental in implementing significant cost-saving measures at the inception of the case and orchestrating the disposition of various assets, including leases related to the closed locations at savings of more than $1.2 million.
After lengthy negotiations, the parties reached a global settlement that resulted in a plan that provided for reorganization and alternatively, liquidation if unsecured creditors were not paid 23% on the dollar by mid-June 2008. The plan resolved virtually all claims against the company, including the subordination of $44 million owed to various Four Points' affiliates and eliminated the need for any post-bankruptcy litigation.
Led by partners James S. Carr and Eric R. Wilson and special counsel Robert L. LeHane, the Kelley Drye team consisted of bankruptcy, litigation and real estate professionals, including partner Joseph A. Boyle; and paralegal Marie Vicinanza.