GemsTV files for Chapter 11 bankruptcy protection

Unable to survive without sufficient profitability, GemsTV has filed for Chapter 11 bankruptcy protection with the U.S. bankruptcy Court for the District of Delaware, reports say. GemsTV, a jewellery television retailer has requested the court to liquidate its assets. The retailer said it was driven to the decision, due to low profits that could not maintain its operations, and also as its profits were further deeply affected by the economic recession, reports add.

As per reports, the television retailer’s debts lie between $100 million and $500 million, with between 200-to- 999 creditors, and assets valued at $10 million to $50 million. In the list of creditors, the first name is of B.H. Multi Com Corp who is owed $2.8 million, DirecTV has to recover $2.7 million, Bangkok-based Creative Gems & Jewelry is owed $2 million, Hong Kong’s Emerald House is owed $1.41 million, and Mumbai-based Charisma Jewellery is owed $1.38 million.

A month earlier, GemsTV had announced its decision to shut down its U.S. operations, in order to put a stop to its cash burden and will end broadcasting on April 15, 2010, and all its staff contracts will expire on May 6, 2010. Following this, DirecTV, the supplier of satellite infrastructure for GemsTV broadcasts, had filed a lawsuit against the television retailer, for alleged breach of an affiliation agreement between the two. DirecTV asked for $25 million as compensation, and for the court not to permit GemsTV to settle any payment leaving DirecTV with less than $25 million in actual money or assets, reports say.