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Gems TV Files Liquidating Plan in DirectTV Settlement
July 28 (Bloomberg) -- Gems TV (USA) Ltd., a former television retailer of gemstone jewelry products, filed a plan yesterday to settle a dispute with DirectTV and sell off remaining assets and distribute the proceeds to creditors.
The Reno, Nevada-based company filed for bankruptcy April 5 in Wilmington, Delaware, saying it would seek “an orderly liquidation of its assets.” Gems TV listed about $120 million in debt and about $51.2 million in assets when it sought bankruptcy protection.
“The plan implements a settlement and compromise” between Gems TV, DirectTV, and its direct and indirect parents, NCS Group Co. Ltd. and Gems TV Holdings Ltd., the company said in court papers.
Under the agreement, DirectTV, the largest U.S. satellite- TV provider, would get full payment of its $9.4 million unsecured claim and its $381,084 administrative claim, according to court documents. DirectTV would drop its lawsuit against Gems TV in return. DirectTV sought $25 million from Gems TV for an “alleged breach of an affiliation agreement,” resulting from the broadcasting termination.
Unsecured creditors owed about $28.1 million would get a recovery of 95 percent to 100 percent of their claims, according to the disclosure statement, a description of the liquidating proposal. Its direct and indirect parents, NCS Group Co. Ltd. and Gems TV Holdings Ltd., are projected to see about 2 cents on the dollar for its $93.2 million in subordinated claims.
Home-Shopping Channel
The company won court approval earlier this month to sell its non-inventory assets to Zalemark Holdings Co. for about $3 million, court papers show.
Gems TV, founded in 2006, sold jewelry through its round- the-clock home-shopping channel, GemsTV, reaching about 37 million viewers through satellite television providers DirectTV Inc. and Dish Network Corp. and select cable markets, court papers show. The company also sold merchandise through its online store.
The retailer decided to cease operations March 2, and told all its employees they would be terminated as of May 6. The company notified its satellite providers they would no longer be broadcasting after April 15, according to court documents.
The case is In re Gems TV (USA) Ltd., 10-11158, U.S. Bankruptcy Court, District of Delaware (Wilmington).
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