Friedman’s Ordered to Liquidate Inventory

Jewelry retailer Friedman’s has been ordered by a federal bankruptcy judge to liquidate its inventory, estimated at $400 million. The company said it is preparing to shut down 377 Friedman’s and Crescent stores in the U.S. and to sell its other 78 stores, according to Reuters.

Once the third-largest specialty jewelry retailer in the U.S., Friedman's declared bankruptcy in January 2005, and filed again for Chapter 11 bankruptcy in January 2008.

Less than two weeks ago, Bradley Stinn, the former CEO of Friedman’s Inc. and its affiliate Crescent Jewelers, was convicted of securities fraud, mail fraud and conspiracy for his role in “a massive accounting fraud scheme designed to inflate Friedman’s financial performance.”

Stinn and a number of other officers, including Friedman’s former chief financial officer Victor Suglia, were indicted for “repeatedly” lying to shareholders about Friedman’s financial performance. Following the conviction by a federal jury in Brooklyn, Stinn faces a maximum sentence of 25 years imprisonment on the most serious charge.