M. Fabrikant creditors committee seeks discovery relating to allegations of fraudulent transfers

By Reshmi Basu

New York, Nov. 13 - M. Fabrikant & Sons, Inc.'s official committee of unsecured creditors asked the court to order the executor of the estate of Phillip Hahn to produce documents and provide testimony related to allegations of misconduct, according to a Tuesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

The deceased Hahn, the founder and former co-chairman of the company's board of directors, has been shrouded in accusations of misconduct relating to fraudulent transfers made from 2002 to 2005.

According to the motion, the committee is conducting an investigation to recover as much as $10.25 million and is looking into whether the insolvent MFS transferred tens of millions of dollars to companies affiliated with the Fortang family, which controlled the company.

Hahn and the executor of his estate, Irving Rosenzweig, were members of the board at the time of the questionable transfers.

A hearing is scheduled for Nov. 27.

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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