New York—One of the country’s largest precious metal refiners filed for bankruptcy Friday following the discovery of “inventory discrepancies” in its books and records this past summer.

Republic Metals Corp., which has its main office in New York and processes metals at a facility in Miami, filed Chapter 11 in U.S. Bankruptcy Court for the Southern District of New York.

The company is looking for a buyer, and on Oct. 29, Swiss refiner Valcambi issued a press release stating that it had “reached an understanding” to acquire Republic Metals Corp. and the companies were “working through the logistics of the planned integration.”

Jennifer Mercer, a spokeswoman for Republic Metals, clarified Monday that no deal had been finalized but that talks with Valcambi are ongoing. A Valcambi spokeswoman did not respond to request for comment.

Founded in 1980 by Richard Rubin, Republic owns Republic Metals Refining Corp. and Republic Carbon Company LLC, which processes spent carbon from metals mines.

In a declaration filed alongside the company’s Chapter 11 petition, Chief Restructuring Officer Scott Avila outlined the events that led up to the decision, starting in April when the company “discovered a significant discrepancy in its inventory accounting” while preparing its full year 2018 and first quarter 2018 financials.

Republic Metals retained accounting firm EisnerAmper LLP, which confirmed that there were discrepancies in both the company’s books and records, though Mercer said she could not elaborate on the scope or nature of the discrepancies.

In late June, the company got together with its senior lenders to ask the banks to give it “breathing room” while it worked to sort out the inventory issues and develop a plan to either rectify them or restructure, the declaration states.

But the banks began to press the company a few weeks later, serving it with termination, default and demand notices July 10.

Around the same time, Republic Metals began looking for a buyer, contacting a “major, strategic metals refiner about [a] possible acquisition”—meaning Valcambi—and bringing Avila on board as CRO.

According to the declaration, the banks agreed to hold off to give Republic Metals a chance to work out a deal with the potential buyer. But as the months passed and no deal was forthcoming, the banks cut off negotiations and one lender, ICBC Standard Bank, suspended the refiner’s ability to pay customers via credit on the London metals exchange, its most common form of payment.

Avila, the company’s board and its creditors opted to file Chapter 11 on Nov. 2, as the refiner has “limited cash” and “the inability to trade metals or deliver refined goods,” the declaration states.

If a deal with Valcambi isn’t reached and the refiner cannot find another buyer, then it will be forced to liquidate its assets and inventory.

Republic Metals Refining Corp. has between 1,000 and 5,000 creditors, with assets totaling $174.8 million but liabilities topping $265 million, according to court papers.

Its largest secured lenders include Mitsubishi International Corp., the New York branch of Coöperatieve Rabobank U.A. and Bank Leumi USA, which is among the lenders that have pulled out of the diamond and jewelry trade in recent years.

The company’s No. 1 unsecured creditor is Parsippany, New Jersey-based Laurelton Sourcing LLC, a subsidiary of Tiffany & Co. According to the Chapter 11 petition, Republic owes Laurelton more than $17 million.

Other trade debts include nearly $10 million owed to Chihuahua, Mexico-headquartered mining company Coeur Mexicana SA de CV; more than $5 million owed to Premier Gold Mines Ltd. in Thunder Bay, Ontario, Canada; and Geib Refining Corp. in Warwick, Rhode Island, which is owed more than $3 million, court records show.

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