NEW YORK — M. Fabrikant & Sons, the $1 billion fine jewelry and diamond firm, faces two lawsuits over $7.5 million in unpaid invoices.
The lawsuits were filed in Manhattan federal court and claim the company has stated that it is having financial problems. M. Fabrikant declined to comment Wednesday.
Blue Star, a diamond manufacturer, importer and exporter based in Mumbai, India, filed a lawsuit against M. Fabrikant seeking $5.6 million in unpaid invoices. K P Sanghvi & Sons, also a diamond supplier based in Mumbai, filed a similar lawsuit for $1.9 million.
According to court documents in both cases, M. Fabrikant told Blue Star and K P Sanghvi that it could not pay its invoices “due to dire financial circumstances.”
Earlier this week, M. Fabrikant formed a joint venture — Fabrikant-Tara International — with Tara Jewels, one of the largest jewelry producers in India. The new firm, which includes the operations of M. Fabrikant & Sons subsidiary Fabrikant-Leer International Ltd., will produce a range of unbranded diamond and colored-stone jewelry.
The company said it reached a new agreement with its domestic lenders and that it was seeking a new agreement with its foreign lenders.
The cases were filed separately — K P Sanghvi’s on July 28 and Blue Star’s on Aug. 1. Court documents were not immediately available.
M. Fabrikant & Sons is a family-owned-and-operated business founded here in 1895. In the Fifties, the company started expanding internationally into Antwerp, Belgium; Tel Aviv, and Mumbai, setting up manufacturing and trading offices, and other companies followed suit.
The company has a number of subsidiaries, including Suzy Fabrikant; Robert Lee Morris, a designer jewelry line, and Simmons Jewelry Co., in which the firm is a partner with Def Jam Records founder Russell Simmons and his wife, Kimora Lee, who designs the Hello Kitty by Kimora Lee Simmons collection, which was launched at wholesale in June.