The Tel Aviv County Court has appointed a receiver for DTC Sightholder LID. A guard is currently stationed in LID’s offices, and copies of the court’s order have been posted on the company’s doors in the Noam Building of the Israel Diamond Exchange. None of LID’s employees were seen at the offices this morning.
The order was issued at the request of an Israeli bank, First International Bank, which is owed more than NIS 30 million ($8.3 million).
According to the notice, the receiver is to take hold, protect and, if needed, to manage the company’s assets; operate the business as a “live business” in order to protect its reputation; and issue a report on the company’s state within 14 days
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Also, the receiver is not allowed to sell any of the company’s assets without the court’s approval. This last order may mean that the company will not be able to sell diamonds or jewelry.
LID has been suffering difficulties for some time. In March 2007, its U.S. arm, L.I.D. Ltd. NY filed for Chapter 11 protection after one of its lenders refused to allow the company to withdraw from its accounts. According to court records, the company owed bank lenders about $43 million.
In its bankruptcy petition, LID listed $157.8 million in assets and $143.9 million in debts. In 2006, it reduced its debts to U.S. banks by some $18 million plus interest, the company reported.
Two years prior to that, the company moved many of its operations to India. In an interview with IDEX Online in December 2004, LID CEO David Elyshaev said the move was intended to streamline operations. Their Indian plant, located in Visakha Pattana, polished diamonds and manufactured jewelry.
Since then, LID has reorganized, made changes to its managerial team and modified sales targets.
Neither the company nor its receiver was available for comment.
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