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October 20, 2019Cart

Business

by Westchester County Business Journal
by WCBJ

New Dover Group, luxury watch seller, files for bankruptcy

A luxury watch dealer in Rockland County has filed for bankruptcy protection, blaming financial problems on a watchmaker for suddenly stopping the clock on their distribution deal.

New Dover Group Ltd. of Valley Cottage filed a Chapter 11 reorganization petition July 8 in federal bankruptcy court in White Plains.

New Dover Group had exclusive rights to sell Salvatore Ferragamo, Versace and Versus timepieces in the United States and the Caribbean for Vertime B.V., a Netherlands watchmaker.

New Dover Group was assured that its distribution deal would be renewed in 2017, company owner and President Samuel Friedmann of Monsey stated in an affidavit filed on Monday.

“This promise was not kept,” he said.

Friedmann was born in Lugano, Switzerland, and began selling watches as a teenager, according to a company profile. He moved to New York in 1990. In 2001, he bought Gevril, a Swiss watchmaker founded in 1743.

By his account, Gevril grew to a $25 million business in 12 years.

By then, New Dover had made a deal to distribute timepieces for Vertime, an affiliate of Timex Group USA of Middlebury, Connecticut.

From 2010 through 2016, New Dover claimed in a 2017 lawsuit, it increased annual sales tenfold.

But Vertime violated its exclusive distribution rights and undercut business, New Dover alleged, by “dumping” 35,000 watches at heavily discounted prices, in unauthorized sales to retailers such as Costco and online sellers.

New Dover claimed that Vertime assured the company in late December 2016 that the distribution deal would be renewed. A few days later, “after six years and over $40 million in purchases,” Vertime terminated the arrangement.

Vertime sued first, in federal court in White Plains, accusing New Dover of continuing to sell its timepieces after the deal expired, using its trademarks, and failing to pay a debt of 2,500,000 Swiss Francs.

New Dover filed a counterclaim for $5.9 million, alleging that Vertime had breached the distribution deal by directly selling timepieces in its market.

The case is pending.

New Dover bankruptcy documents list a claim of $2.5 million to Vertime.

Initially, New Dover declared assets of nearly $1 million and liabilities of $15.6 million.

The liabilities included $6.1 million to JP Morgan Chase Bank, $5.2 million to M&T Bank, and $2.6 million to “CBP,” Washington, D.C., in an apparent reference to U.S. Customs and Border Protection.

The CBP claim was listed as recently as a July 26 filing but was not included in Friedmann’s July 29 affidavit. The JPMorgan claim was reduced to $60,239 and total liabilities to $9.3 million.

New Dover is represented by Joseph Balisok of Balisok & Kaufman PLLC in Brooklyn.