Creditors File Chapter 7 against Robbins Diamonds

Five diamond companies have filed an involuntary Chapter 7 bankruptcy petition against Philadelphia-area retailer Leo Robbins and Sons, Inc., which does business as Robbins Diamonds and is known for its ads featuring a cartoon character version of the jeweler wearing a diamond in his beard.

Two New York-based companies, Leo Schachter Diamonds LLC and Sandberg and Sikorski Corp. (doing business as A. Jaffe), and three Ramat Gan, Israel-based companies, including Salant Group Ltd., A.D.R. Kropveld Diamonds Ltd. and Yerushalmi Bros. Diamond Ltd., filed the joint petition Nov. 16 in U.S. Bankruptcy Court for the Eastern District of Pennsylvania in Philadelphia.

According to a summons filed in the case, Robbins Diamonds is required to submit a motion or answer to the Chapter 7 petition within 20 days.

Chapter 7 is a type of bankruptcy intended to fairly distribute the debtor's available non-exempt property to its creditors. A Chapter 7 filing typically leads to liquidation when a company files on its own accord, although in some cases, the company settles its debt and can continue to operate under the direction of a court trustee and may avoid liquidation. 

According to court documents, the five companies are claiming the retailer collectively owes them about $1.37 million for goods.

The largest claim, court papers show, belongs to the Israeli company Salant Group, which claims the retailer owes the company nearly $1.02 million. Leo Schachter is next, with a claim alleging it is owed $182,772, followed by Yerushalmi Bros., which submitted a claim for $106,887 and A.D.R. Kropveld with a claim of $60,000. Sandberg and Sikorski entered a claim for $5,000.

Owner Gerald Robbins did not respond to request for comment on the filing.

According to the company's Web site, the company operates four retail locations: Robbins 8th and Walnut on Walnut Street in Philadelphia; Robbins Allentown Diamonds in Allentown, Pa.; Robbins Delaware Diamonds in Newark, Del., and Robbins Hamilton Marketplace in Hamilton, N.J.

In a National Jeweler profile story which originally ran in the March 2009 print edition, Robbins Diamonds Vice President Gordon Robbins said the retailer considered itself a "bridal superstore," and seemed confident the business would weather the tough economic times.

"The challenges we're facing now are due to the economy, but they're cyclical and they'll pass," he said.