Case Study

Jewel Recovery Corporation

CLIENT: Jewel Recovery Corporation

Gordian Group was retained by Jewel, a limited partnership established pursuant to the Zale bankruptcy plan to pursue litigation claims, to assist it in the financial aspects of such litigation.

Business Profiles

Situation

Jewel Recovery was a limited partnership established by the Zale bankruptcy plan to pursue various litigation claims arising from the Zale bankruptcy for the benefit of Zale creditors. Action on these claims was commenced after Zale exited bankruptcy.

Engagement

Gordian Group was retained by Jewel Recovery to assist it in the financial aspects of this litigation. We were selected because of our industry experience, our performance during the Zale bankruptcy and our significant experience in solvency and valuation opinion matters. Gordian Group’s work revolved around two matters: (i) evaluating the acquisition of Gordon Jewelry by Zale, specifically as it pertained to the solvency of Gordon Jewelry following the transaction to determine if the acquisition was a fraudulent conveyance, and, (ii) evaluating a series of transactions between Zale and an affiliated company, specifically with respect to the concepts of solvency and fraudulent transfer. This work included performing a series of "what if", solvency and valuation analyses to estimate damages incurred by various creditor constituencies. Through these analyses, Gordian Group was able to demonstrate that Zale was insolvent at various points in time, and that these transactions were actually fraudulent conveyances.

Outcome

Our testimony was integral to the trustee obtaining tens of millions of dollars of additional consideration for creditors.