Modi, who is being investigated for illegal transfer of over Rs 12,000 crore from Punjab National Bank, has a majority stake in Firestar Diamond and its other sister companies through his other companies.Firestar Diamond Inc filed the Chapter 11 voluntary petition in the New York Southern Bankruptcy Court on Monday. Entering an order for relief, the US bankruptcy court in the Southern District of New York said that the filing of case imposed an automatic stay against most collection activities.
“This means that creditors generally may not take action to collect debts from the debtor or the debtor’s property,” the bankruptcy court said in its two-page order. “For example, while the stay is in effect, creditors cannot sue, assert a deficiency, repossess property, or otherwise try to collect from the debtor. Creditors cannot demand repayment from the debtor by mail, phone, or otherwise,” it said.”Creditors who violate the stay can be required to pay actual and punitive damages and attorneys fees,” the court warned in the order, copies of which have been transmitted to multiple stake holders, including a few dozen creditors of Firestar Diamond Inc.
According to court papers, Firestar Diamond and Fantasy have approximately US$ 90 million of annual sales to some of the most well-known and well-regarded major department stores, major speciality stores chains, wholesale clubs, and United States armed services bases. Their accounts include Zales, Kays, Jareds, COSTCO, Sams Club, Macys, JC Penney, and US Navy.