M. Fabrikant asks court to approve sale of life insurance policies

By Reshmi Basu

New York, June 14 - M. Fabrikant & Sons Inc. asked for approval of the sale of certain life insurance policies, according to a Thursday filing with the U.S. Bankruptcy Court for the Southern District of New York.

In connection with the proposed sale, Melville Capital, a life settlement broker, has engaged in extensive marketing for the policies and has received offers from several institutional investors,

Estimations on the sale value of the policies range from $1.3 million to $1.75 million, according to the motion. Moreover, Melville said it believes that the policies will fetch a gross sale price of at least $1.25 million.

The debtor said that since there will be no revenue stream to cover the premiums, the company wishes to "monetize the policies as quickly as reasonably possible."

In November 2003, the debtor purchased life insurance policies from two former employees. Each of the policies provide for the payment of $4 million to the company upon the death of the insured.

M. Fabrikant, a New York-based manufacturer and distributor of diamonds and gemstone jewelry, filed for Chapter 11 on Nov. 17, 2006. Its case number is 06-12737.

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