Lawyers for the Alpha Omega Jewelry chain and the bank that seized its assets reached an agreement last night that allows the company to reopen its four high-end stores this weekend under a new management structure. Financially troubled founder Raman Handa will retain ownership, at least for now.
Day-to-day operations at the Cambridge-based company will be run by a new "chief restructuring officer," Michael O'Hara, an investment banker with an extensive background in the jewelry business, while Handa and his wife will remain directors of Alpha Omega, said the company's attorney, Richard E. Mikels, a partner at the Boston law firm Mintz Levin Cohn Ferris Glovsky and Popeo.
Mikels said the new management is expected to rehire most of the company's 100 employees, who were told yesterday morning they had been fired, and make good on the back pay they are owed. He said he expected customers would be able to pick up items on which they'd made deposits and watches and jewelry left for repair.
"Every effort is going to be made to get the Alpha Omega stores open as quickly as possible, maybe Saturday," said Mikels.
O'Hara will manage the operation with the help of a new chief financial officer, Gordon Lew is, a veteran turnaround specialist, as the company looks for investors or buyers in the coming weeks, Mikels said. He said there was a possibility it would file for restructuring under Chapter 11 of the US Bankruptcy Code next month.
The bank's attorney, Donald E. Rothman, partner at the Boston firm Riemer & Braunsteun, didn't return phone calls yesterday.
Representatives of the bank, the LaSalle Business Credit arm of Bank of America Corp., took possession of Alpha Omega's inventory this week. The action came after Handa, who had been struggling with financial problems, and his family disappeared last weekend without notifying relatives or business associates. Mikels said Handa had flown to India to convalesce after receiving medical attention at the Lahey Clinic in Burlington and hoped to return to Boston next month.
O'Hara didn't return a phone call last night. Mikels said the new chief restructuring officer would make all decisions on hiring and management of the business. "The vast majority of the employees will be rehired," Mikels said. "I don't know if every single one will be rehired. But the intention is to rehire the employees."
One possibility being discussed last night was a staggered reopening of the Alpha Omega stores, with the flagship store in Harvard Square and the store in Boston's Prudential Center opening today and the stores in the Burlington Mall and the Natick Collection mall tomorrow, said a consultant involved in the negotiations, who asked not to be identified for fear of jeopardizing his client relationship.
Several employees and customers stood shivering outside Alpha Omega's store across from Harvard University yesterday morning waiting to see whether it would open. One employee, who declined to give his name, said he was owed not only back pay but also "tens of thousands of dollars" in commissions he earned by meeting sales targets.
Al Mazzarelli, owner of the nearby Alfred Harvard Square hair salon, said he was a friend of Handa's son Amit. Mazzarelli said Amit came by the hair salon last week to pick up Mazzarelli's wife's wedding ring, which needed to be repaired. "Then on Wednesday I heard that the store was being closed," he said. "I couldn't believe it."
Another customer, mortgage lender Tai Lee of Newton, said he'd come to retrieve a Jaeger-LeCoultre watch that he dropped off for repair last July. "I'm just going to wait to see if they open," Lee said. "If nothing happens within a week, I guess I'll file a police report."
Robert Weisman can be reached at email@example.com.