PNB Scam: U.S. Court Issues An Interim Stay Order

Today, a U.S. Court issued an interim order that prevents creditors to collect debt from Modi's Firestar Diamond Incorporated (FDI.) The Court order came after Mihir Bhansali filed for Bankruptcy on behalf of three firms. Bhansali is the President of FDI, Fantasy Incorporated and A. Jaffe Incorporated. The FDI, in the New York Southern Bankruptcy Court, filed a Chapter 11 voluntary petition. The Chapter 11 petition is usually filed by firms requiring time to repay their debts.

The Court order said when the interim stay is in effect, creditors cannot repossess the property, sue and demand repayment by phone, mail etc. The Court order read, “For example, while the stay is in effect, creditors cannot sue, assert a deficiency, repossess the property, or otherwise try to collect from the debtor. Creditors cannot demand repayment from the debtor by mail, phone, or otherwise.” The Court also warned the creditors, on violating the orders they will be punished. Court order read, “Creditors who violate the stay can be required to pay actual and punitive damages and attorney’s fees.”

The FDI and Fantasy Incorporated's clients in the U.S. include major departmental stores, wholesale clubs and armed services. The annual sales of the duo are reported to be around $ 90 million. A few of their clients are Zales, the U.S. Navy, COSTCO, Kays and Jareds.