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Published on 4/2/2018 in the Prospect News Distressed Debt Daily.

Firestar Diamond U.S. Trustee requests examiner to investigate Modi

By Caroline Salls

Pittsburgh, April 2 – The U.S. Trustee overseeing Firestar Diamond, Inc.’s Chapter 11 case asked the U.S. Bankruptcy Court for the Southern District of New York to appoint an examiner, according to a motion filed March 30.

The Region 2 U.S. Trustee, William K. Harrington, said the ultimate owner of each of the debtors in these cases is Nirav Modi, who, according to press and other reports, has been charged by government officials in India in connection with fraudulent and unauthorized transactions at Punjab National Bank.

“An examiner should be appointed to provide the court, the U.S. Trustee and creditors in this case with transparency and clarity as to the role, if any, that Modi plays or has played with respect to these Chapter 11 cases,” Harrington said in the motion.

Specifically, Harrington said the examiner would investigate the relationship between the Firestar debtors and any entity under the control of Modi to determine whether and to what extent Modi has the ability to direct and/or influence the conduct, decisions or actions taken by the debtors, whether any current officer or director participated in fraud or dishonesty in the management of the affairs of the debtors and whether any claims or causes of action in favor of the debtors may arise from the alleged fraud.

Firestar Diamond is a subsidiary of Mumbai-based diamond manufacturer Firestar International Pvt. Ltd. The company filed bankruptcy on Feb. 26 under Chapter 11 case number 18-10509.


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