Edina jeweler Scheherazade filed for Chapter 11 bankruptcy Wednesday, a result of both the credit crunch and an industry that has been hit hard by the recession. Court documents showed the company owed almost $1.2 million to its 20 largest creditors.
The family-owned store, with a 40-year history and a spot at the Galleria Mall since it opened, plans no changes to day-to-day operations.
Scheherazade attorney Ralph Mitchell, of Lapp, Libra, Thomson, Stoebner and Pusch, said a financial consultant began working with the jeweler prior to the bankruptcy filing, which became necessary when Bank of America didn't renew a line of credit.
Since August, Scheherazade has paid $700,000 on a $1.5 million loan from Bank of America, Mitchell said, and the jeweler continues to work with the bank.
"We're optimistic about getting in, getting what we need to get done quickly, and getting out," he said.
Though the jewelry industry has struggled during the recession, Scheherazade is hitting sales projections, Mitchell said. It offers jewelry in a price range from $500 to more than $50,000, according to a company fact sheet.
Co-owner Scott Rudd said in a statement it would be "business as usual" at the store, which is known for its designer jewelry lines.
"We're taking these measures so we are well positioned for the future," he said.
