Compass-Backed Lugano Files for Bankruptcy After Ex-CEO Sued

Core Viewpoint - Lugano Holdings Inc., a high-end jewelry retailer, has filed for bankruptcy following allegations against its former CEO for embezzlement and misrepresentation of investment deals [1][2][3] Group 1: Bankruptcy Filing - The company filed for Chapter 11 bankruptcy protection in Delaware, listing at least $100 million in assets and over $500 million in liabilities [2] - The bankruptcy filing is part of a process to sell the business to Enhanced Retail Funding, pending approval from a bankruptcy judge and subject to better offers [2][8] Group 2: Allegations Against Former CEO - Former CEO Mordechai Haim Ferder is accused of stealing millions and misrepresenting financial transactions, leading to a civil lawsuit filed by Lugano [3][4] - The lawsuit claims Ferder forged invoices and misled stakeholders about the company's financial performance by disguising transactions as ordinary sales [5][6] Group 3: Financial Impact - Following the allegations, the company is revising its previously reported revenue of $470 million and operating income of $180 million for 2024 to reflect significantly lower actual figures [7] - Compass, which acquired a majority interest in Lugano in 2021 for $256 million, is providing $12 million in financing to support the bankruptcy process [4][8]