Attorney General's News Release

January 3, 1996

Nixon opposition to bankruptcy plan enables Kawin-Chotin customers to keep refunds

Jefferson City, Mo. — Hundreds of customers who received refunds for altered diamonds they bought unknowingly from a now-bankrupt St. Louis jeweler will not have to turn over their money to the bankruptcy court, Attorney General Jay Nixon said today. Nixon's office had opposed efforts by the bankruptcy trustee for Kawin-Chotin Inc. to force the customers to return more than $750,000 that had been refunded.

A federal bankruptcy judge in St. Louis last month approved the abandonment of claims against the Kawin-Chotin customers. In addition, other customers who returned their refunds will receive their money back.

“The people who received refunds should not have to live with the fear they will be sued for keeping what is rightfully theirs,” Nixon said. “This closes a successful two-year fight by the Attorney General's Office to obtain those refunds in the first place and then to enable the customers to keep them.”

Nixon sued Kawin-Chotin in 1993 and obtained full or partial refunds for approximately 400 customers who had purchased the diamonds, which were fracture-filled or otherwise altered to hide flaws.

After Kawin-Chotin went into bankruptcy, the court-appointed trustee sent a letter in September 1994 to customers who had received the refunds, demanding they return the refunds voluntarily or face a lawsuit. At that time, Nixon said he would vigorously oppose those demands and requested the trustee to abandon the claims against the customers.

Last November the trustee advised the bankruptcy court that he recommended abandoning the claims against the refunds. The court approved the request on Dec. 18.

Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to Press Secretary John Fougere.

E-mail      Phone: 573-751-8844         Fax: 573-751-5818