Ultra Diamonds Details
hough market share grew from 1991 through 2006, a faltering economy struck the fine jewelry retailer and in 2009 ULTRA Stores Inc was one of over 80 other major retailers that filed Chapter 11.[4] bankruptcy. Danny Marks cited in the bankruptcy report a "weak retail climate and a lack of liquidity" as the case which forced Ultra into Chapter 11. The situation was similar to that cited by other retail jewelry chains that filed for bankruptcy in the same year. The claims were bolstered with the fiscal year end report for 2008 (published in February 2009) showing a decrease of 10.8% and a staggering 18.9% decrease over the critical holiday season.[5]
However, unlike many other companies that filed Chapter 11 bankruptcy in 2009 ULTRA emerged from the three month stint of bankruptcy with a strengthened capital base. This was accomplished when Bank of America provided a $30 million line of credit and Crystal Capital assumed 56% ownership of Ultra in exchange for the conversion of half of its debt into equity. Ultra's unsecured creditors will hold an 18% ownership share in the jewelry chain, plus a $3 million note. As well as all of these measures, the Ultra's management team took salary cuts while assuming a 26% ownership interest.[6] ULTRA did close 30 "underperforming locations" during the bankruptcy and still operates 178 locations.[7]
hough market share grew from 1991 through 2006, a faltering economy struck the fine jewelry retailer and in 2009 ULTRA Stores Inc was one of over 80 other major retailers that filed Chapter 11.[4] bankruptcy. Danny Marks cited in the bankruptcy report a "weak retail climate and a lack of liquidity" as the case which forced Ultra into Chapter 11. The situation was similar to that cited by other retail jewelry chains that filed for bankruptcy in the same year. The claims were bolstered with the fiscal year end report for 2008 (published in February 2009) showing a decrease of 10.8% and a staggering 18.9% decrease over the critical holiday season.[5]
However, unlike many other companies that filed Chapter 11 bankruptcy in 2009 ULTRA emerged from the three month stint of bankruptcy with a strengthened capital base. This was accomplished when Bank of America provided a $30 million line of credit and Crystal Capital assumed 56% ownership of Ultra in exchange for the conversion of half of its debt into equity. Ultra's unsecured creditors will hold an 18% ownership share in the jewelry chain, plus a $3 million note. As well as all of these measures, the Ultra's management team took salary cuts while assuming a 26% ownership interest.[6] ULTRA did close 30 "underperforming locations" during the bankruptcy and still operates 178 locations.[7]
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