Gems TV (USA) Ltd., a television retailer of gemstone jewelry products, sought bankruptcy protection to sell its assets, after shutting down operations last month.
The Reno, Nevada-based company listed about $120 million in debt and about $51.2 million in assets in Chapter 11 court papers filed today in U.S. Bankruptcy Court in Wilmington, Delaware.
"Since it began operations, the company has struggled to maintain a sufficient level of profitability to sustain its operations and service its debts," Gems TV President, Diane Schneiderjohn, said in court documents. The company's "troubles were exacerbated this past year as nationwide economic conditions resulted in decreased discretionary spending."
Gems TV, founded in 2006, sells its jewelry through its round-the-clock home shopping channel, GemsTV, which reaches about 37 million viewers through satellite television providers DirectTV Inc. and Dish Network Corp. and select cable markets, court papers show. The company also sells merchandise through its online store.
The company decided to cease operations March 2 after it was "unable to achieve sufficient operational and economic scale, due primarily to the challenging economic environment."
Gems TV informed all its employees they would be terminated as of May 6, and notified all its satellite providers they would no longer be broadcasting after April 15, according to court documents.
The company said DirecTV is one of its largest unsecured creditors, owed $2.67 million.
DirecTV, based in El Segundo, California, the largest U.S. satellite-TV provider, asked a federal court last month to partially freeze Gems TV assets, the retailer said in a statement. DirectTV is seeking $25 million from Gems TV for an "alleged breach of an affiliation agreement," resulting from the termination, Schneiderjohn said.
The company is seeking "an orderly liquidation of its assets," Schneiderjohn said in court filings.
The case is In re Gems TV (USA) Ltd., 10-11158, U.S. Bankruptcy Court, District of Delaware (Wilmington).
To contact the reporters on this story: Phil Milford in Wilmington, Delaware, at email@example.com; Michael Bathon in Wilmington, Delaware, at firstname.lastname@example.org.