Luxury jewelry designer Lugano Diamonds & Jewelry has voluntarily filed for Chapter 11 bankruptcy protection, initiating a court-supervised sale process aimed at maximizing the value of its assets, the company announced Monday.

The high-end jeweler, a subsidiary of Compass Diversified Holdings (CODI), said it will continue operating normally throughout the restructuring period.

Stalking Horse Bid Secured

Lugano said it has entered into an agreement with Enhanced Retail Funding, which will support the company’s ongoing sales and operations during the Chapter 11 process.
The investment firm will also act as the stalking horse bidder, setting the baseline offer for the planned asset sale.

The company added that the proposed sale remains open to competing bids, and it is actively inviting additional qualified bidders to participate.

Financing to Sustain Operations

To maintain liquidity during the restructuring, Lugano is seeking court approval for a $12 million debtor-in-possession (DIP) financing facility, which would provide up to $10 million in new funding.

CODI separately confirmed that it has agreed to provide DIP financing to support the bankruptcy process.

Parent Company Expresses Support

“We support the Lugano board’s decision to file for Chapter 11 as the best choice for maximizing value from Lugano’s assets,” said Elias Sabo, Chief Executive of CODI. He emphasized that none of CODI’s other eight subsidiaries are involved in the filing.

The company said it expects the restructuring and sale process to proceed without disrupting operations or customer service.