Ultra Stores Emerge from Chapter 11, Unsecured Creditors Get 18% Stake

Ultra Stores, Inc. has emerged from Chapter 11, the company said Tuesday. Crystal Capital will assume 56 percent of the ownership of Ultra Stores in return for converting half of its debt into equity and unsecured creditors will assume 18 percent ownership along with a $3 million note.

Bank of America will remain as the senior lender, providing a $30 Million revolving line of credit.

The existing management team, which will remain with the company, will vest into 26% of the ownership of Ultra Stores.

The company filed for Chapter 11 bankruptcy protection in April of this year, listing liabilities in the $10 million to $50 million range. The retailer, with about 180 locations across the U.S., said in the bankruptcy filing that it had defaulted on certain debts resulting in a loss of operating liquidity of about $11.

Ultra Diamonds will close approximately 30 underperforming stores and has worked out temporary rent relief in a number of its remaining 178 locations. “These two initiatives will enable us to weather these tough economic times, said Daniel Marks, president and CEO of Ultra Stores.

Ultra Stores, the fifth largest fine jewelry chain in America, was founded in 1991, and is headquartered in Chicago, IL.