LID Ltd. Owes the Banks More Than $43 million

Court records show that L.I.D. Ltd., NY owes bank lenders about $43 million. The company filed for Chapter 11 protection in New York after one of its lenders refused to allow the company to withdraw from its accounts.

The company listed in its bankruptcy petition assets of $157.8 million and debts of $143.9 million. It expects 2007 sales to reach $25 million.

LID’s Chief Financial Officer, Ronen Herzig, Bank Leumi USA "may have wrongfully restrained" one of LID's accounts. Chief Executive Lyle Rose went further stating that the company filed for Chapter 11 protection to “protect our assets and the integrity of the business in face of what we believe to be unreasonable demands and actions taken by our bank lenders.”

Court records reveal that debt to creditors holding the 20 largest unsecured claims amounts to about $400,000. But according to one press report, LID Ltd owes unsecured creditors approximately $101 million.

LID Ltd said it has been conducting debt reduction negotiations with four of the banks it works with in the U.S.: HSBC, ABN AMRO, Sovereign Bank and Bank Leumi. LID is a DTC sightholder owed by the Elishayov brothers. In 2006, it reduced its debts to U.S. banks by some $18 million plus interest, the company reported.

LID has recently been reorganized, with changes in its managerial team and modified sales targets. The restructuring program involves a refocusing of the jewelry line on the needs of independent jewelers that will enable the company to sell higher margin items.