Samuels Jewelers – Court Appoints Examiner to Investigate Alleged Fraud Involving Mehut Choksi

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October 3, 2018 – Further to the motions of Punjab National Bank and the U.S. Trustee, the Court hearing the Samuels Jewelers case issued an order directing the appointment of an examiner to conduct an investigation into (i) the relationship between the Debtors and Mehul Choksi and (ii) any alleged fraud involving the Debtors and Mr. Choksi [Docket No. 294]. The order states, “Pursuant to section 1104(d) of the Bankruptcy Code, the Office of the United States Trustee (the ‘U.S. Trustee’) shall appoint a disinterested person as an examiner (the ‘Examiner’) in the Debtor’s chapter 11 case. The Examiner will perform the duties of an examiner pursuant to 11 U.S.C. § 1106(a)(3) and (4) as limited by or otherwise defined in this Order. The Examiner is directed to conduct a thorough and independent investigation into (1) whether and to what extent, if any, Mehul Choksi (‘Choksi’), or any entity Choksi directly or indirectly controls, has the ability to direct and/or influence the conduct, decisions or actions taken by the Debtor in this case; (2) whether the Debtor, or any current or past officer, director or representative of the Debtor, participated in any alleged fraud involving Choksi and entities, directly or indirectly controlled by him (the ‘Fraud’); and (3) potential causes of action the Debtor’s estate may have in connection with such activities, including any allegations of fraud, dishonesty, incompetence, misconduct, mismanagement, or irregularity related to actions of Choksi, Gitanjali Gems, Ltd.”

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