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Tuesday, January 20, 2009

Colibri Files for Bankruptcy

The Providence, Rhode Island-based Colibri Group, known in the cigar industry for its handsome torch lighters, abruptly shut down its operation, laying off 280 employees. The official announcement was made Wednesday evening by chief executive officer Jim Fleet who stated "The current economic conditions and credit market turmoil are such that Colibri cannot sustain its current operations and as such must close its doors."

The company has gone into receivership status, a form of bankruptcy in which a third-party is legally appointed to run the company in an effort to recoup as much debt as possible. The move was prompted by Colibri's major shareholder, Founders Equity, which petitioned the Providence Superior Court for receivership.

"The Colibri Group is simply out of money," Timothy P. Gallogly, the company's general counsel, told The Providence Journal. According to Allan M. Shine, Colibri's appointed receiver, the company owes about $14 million to HSBC Bank and almost as much to Sovereign Bank.

Gallogly attributed the company's decision to close to the recent economic downturn coupled with a declining demand for cigar accessories.

"It's an easy purchase to defer when you're tightening your belt," he told the Journal. "We tried our best. We just weren't able to get through this."

Cigar Aficionado attempted to contact the company's service department and headquarters, and although the number is still operational with prompts and recordings, no Colibri executives were available for comment