New York--A U.S. bankruptcy court has approved the expedited sale of A. Jaffe and Firestar Diamond/Fantasy Inc., the U.S. companies owned by Nirav Modi, the diamantaire accused of bilking an Indian bank out of billions.

The ruling was made Wednesday at a hearing held in in New York, and came despite the protests of Punjab National Bank (PNB).

PNB, the state-owned bank Modi allegedly cheated, filed an objection to the sale early Wednesday morning before the hearing, calling the sale process “extraordinarily expedited” and “highly aggressive.”

The bank gave a list of reasons why the sale should be halted or, at the very least, pushed back a month.

PNB said it hasn’t been given the information it needs to help it determine if any of the companies’ assets were purchased using funds fraudulently obtained from the bank, and also stated in its filing that “enormous unanswered questions about the involvement of debtors and their management in the Modi fraud” remain.

“It is imperative that the sale process slow down,” PNB said in its objection, noting that a deceleration would encourage more and better bids while giving the bank more time to obtain information and “better understand the connections, if any, between the debtors and the Modi fraud.”
RELATED CONTENT: Nirav Modi Case Is ‘Another Nail in the Coffin’
In its order approving the sale, the court did not address or mention any of PNB’s concerns, stating only that A. Jaffe and Firestar have provided “good and sufficient notice” of the sale to all parties interested and have engaged in a process to solicit the “highest and best” offers for the companies’ assets.

“I don’t know what happened overseas,” Ian Winters, the attorney representing A. Jaffe and Firestar/Fantasy, said Thursday when asked about PNB’s objection.  

“I think the debtors have been clear from day one that they were not involved in what happened overseas. If PNB believes they have claims, they are entitled to pursue whatever investigative actions they choose.”

He added: “We can’t control what PNB alleges. They put whatever they want to put in their [objection]. At the end of the day, the judge considered their papers, and considered what they had put in their papers, and the judge granted our request.”

The attorneys representing PNB did not respond to requests for comment on the ruling.
RELATED CONTENT: The Nirav Modi Case: What Else We Learned This Week
A. Jaffe Inc. and Firestar Diamond Inc./Fantasy Inc. filed for Chapter 11 bankruptcy protection on Feb. 26.

Winters said they have been trying to sell the companies since the Chapter 11 filing, and currently have 25 potential purchasers that have signed non-disclosure agreements.  

The companies are being sold via sealed bids, with the deadline for the bids set for April 27, and the sale to be finalized by May 15.

Winters said the companies can be sold separately—Firestar with Fantasy Inc. and A. Jaffe with its division, FFJ—or together.

|Subscribe >
National Jeweler

Fine Jewelry Industry News

Since 1906, National Jeweler has been the must-read news source for smart jewelry professionals--jewelry retailers, designers, buyers, manufacturers, and suppliers. From market analysis to emerging jewelry trends, we cover the important industry topics vital to the everyday success of jewelry professionals worldwide. National Jeweler delivers the most urgent jewelry news necessary for running your day-to-day jewelry business here, and via our daily e-newsletter, website and other specialty publications, such as "The State of the Majors." National Jeweler is published by Jewelers of America, the leading nonprofit jewelry association in the United States.