Several Romano’s Jewelers locations across Southern California, including three in San Diego County, have recently closed or are in the process of shutting down, according to the business’ Chapter 7 bankruptcy trustee.
The jewelry business has been dealing with bankruptcy issues for at least five years, and recently, it converted to a Chapter 7 case, said David Seror, the Chapter 7 trustee for R.J. Financial’s, a company that owns some Romano’s Jewelers stores.
Seror said Chapter 7 bankruptcy involves the appointment of a trustee, who examines the business’s financials, and the business’s assets are generally liquidated in an attempt to reimburse creditors.
According to federal bankruptcy court documents, 79 claims have been filed against R.J. Financial/Romano’s Jewelers. The total claim amount is nearly $58 million.
Romano’s attorney David Youssefyeh did not respond when NBC 7 Investigates originally reached out to him about the story, but in an email responding to this story, Youssefyeh told NBC 7 Investigates, the register of claims, filed with the federal court, hasn’t been updated. According to him, the company’s actual liabilities are just over $6 million.
Seror’s job is to find money in order to pay back creditors, which include the IRS and state tax agencies. He recently closed three Romano’s Jewelers locations north of San Diego in Culver City, Downey and Northridge.
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“The stores were not generating sufficient income to pay for payroll, rent and things like that, so I was forced to shut them down,” he said in an interview.
NBC 7 Investigates confirmed at least three other stores in San Diego County have closed. They include two in Carlsbad and one in downtown San Diego. An attorney for Romano’s explained in an email the closures were due to mall renovation issues. In the Carlsbad cases, the attorney wrote those closures were because “the mall is dead.”
In response to the closures, Westfield sent NBC 7 Investigates this emailed statement: “The center declines to comment on Romano’s Jewelers.”
NBC 7 Investigates reached out to Romano’s Jewelers attorney and owner, but have not heard back.
In a separate investigation, our team told you about Romano’s Jewelers’ owner, Randy Abalkhad, and two employees who have been criminally charged in San Diego County with identity theft and conspiracy targeting military.
The charges involve accusations that Abalkhad, manager Carlos Torres and employee Nellie Noland stole private financial information of active-duty military members and added unauthorized charges on their store credit accounts.
Noland has pleaded guilty in the case.
Abalkhad and Torres have pleaded not guilty. Their next court appearance is Sept. 1.
When attempting to contact Abalkhad, NBC 7 Investigates was told all communication should go through his attorney, Youssefyeh.
In regards to the Los Angeles-area stores, Seror said he went to three of the locations in July and requested all of the businesses’ books and records. Abalkhad has not been cooperative, according to Seror. The trustee has had to go to court to get additional orders to access store computers and documents.
Recently, Abalkhad and his attorney filed an appeal to the court order requiring Romano’s Jewelers to turn over records. Federal court documents show that Abalkhad argues there are other stores that share the “Romano’s Jewelers” name that he said are not linked to the locations in bankruptcy.
“We are investigating whether there is a relationship between the R.J. Financial stores and the Diamond Trading stores,” Seror said. Diamond Trading is another financial company that oversees other Romano’s Jewelers locations. Seror said Diamond Trading has operated stores in National City, Lakewood and Glendale.
“It’s far too early to predict how that’s going to turn out,” he said.
Ed Hays, who represents one of the 79 creditors, said he’s concerned the owner of Romano’s Jewelers did not immediately hand over books and records to the Chapter 7 bankruptcy trustee.
“I don’t have a high level of confidence my client will be getting money,” Hays said.
When asked about the likelihood claimants will get the money they feel they’re owed by Romano’s Jewelers, Seror said, “It’s hard to say right now because we really need to wait for the liquidation.”
The process could take between 18 months and two years, the trustee said.
In a separate case involving Romano’s Jewelers, the California Department of Justice is investigating the business, although state officials would not talk about the scope of their investigation.
Ed. Note: This article has been updated to add responses received after initial publish date.
