FINLAY ENTERPRISES INC /DE - FORM 8-K - EX-99 - EX. 99.1. - MAY 2010 MONTHLY OPERATING REPORT

FINLAY ENTERPRISES INC /DE - FORM 8-K - EX-99 - EX. 99.1. - MAY 2010 MONTHLY OPERATING REPORT - July 8, 2010

Attached files

Attached files

file	filename
8-K - FORM 8-K - FINLAY ENTERPRISES INC /DE	mv7-7_8k.htm

EXHIBIT 99.1

GENERAL NOTES TO MAY 2010

MONTHLY OPERATING REPORT

General:

The report includes all activity for all Debtors in these jointly administered cases.

Notes to MOR's

These schedules and statements contain financial information that has been taken from the books and records of the Debtors. The amounts reflected in these financial statements are unaudited. These financial statements are prepared on a consolidated basis.

FORM MOR

7/7/2010

Page 1 of 13

	UNITED STATES BANKRUPTCY COURT
	SOUTHERN DISTRICT OF NEW YORK


In re	Finlay Enterprises, Inc.	Case No.	09-14873 through 14880
	Debtor	Reporting Period:	May 2010

		Federal Tax I.D. #	13-3492802


	CORPORATE MONTHLY OPERATING REPORT

	File with the Court and submit a copy to the United States Trustee within 20 days after the end of the month and submit a copy of the report to any official committee appointed in the case.

	(Reports for Rochester and Buffalo Divisions of Western District of New York are due 15 days after the end of the month, as are the reports for Southern District of New York.)

REQUIRED DOCUMENTS	Form No.	Document Attached	Explanation Attached	Affidavit/Supplement Attached
Schedule of Cash Receipts and Disbursements	MOR-1	Y
Bank Reconciliation (or copies of debtor's bank reconciliations)	MOR-1 (CONT)	N	1
Copies of bank statements		N	1
Cash disbursements journals		N	1
Statement of Operations	MOR-2	Y
Balance Sheet	MOR-3	Y
Status of Post-petition Taxes	MOR-4	N		Y
Copies of IRS Form 6123 or payment receipt		N	1
Copies of tax returns filed during reporting period		N	1
Summary of Unpaid Post-petition Debts	MOR-4	Y
Listing of Aged Accounts Payable		Y	2
Accounts Receivable Reconciliation and Aging	MOR-5	N	3
Taxes Reconciliation and Aging	MOR-5	N	4
Payments to Insiders and Professionals	MOR-6	Y
Post Petition Status of Secured Notes, Leases Payable	MOR-6	Y
Debtor Questionnaire	MOR-7	Y


	I declare under penalty of perjury (28 U.S.C. Section 1746) that this report and the attached documents are true and correct to the best of my knowledge and belief.


	Signature of Debtor /s/ Bruce E. Zurlnick		Date: July 7, 2010

	Signature of Authorized Individual* /s/ Bruce E. Zurlnick		Date: July 7, 2010

	Printed Name of Authorized Individual Bruce E. Zurlnick		Date: July 7, 2010

	*Authorized individual must be an officer, director or shareholder if debtor is a corporation; a partner if debtor is a partnership; a manager or member if debtor is a limited liability company.

FORM MOR

7/7/2010

Page 2 of 13

In re	Finlay Enterprises, Inc.		Case No.	09-14873 through 14880
	Debtor		Reporting Period:	May 2010


	SCHEDULE OF CASH RECEIPTS AND DISBURSEMENTS (1)

	Amounts reported should be from the debtor’s books and not the bank statement. The beginning cash should be the ending cash from the prior month or, if this is the first report, the amount should be the balance on the date the petition was filed. The amounts reported in the "CURRENT MONTH - ACTUAL” column must equal the sum of the four bank account columns. Attach copies of the bank statements and the cash disbursements journal. The total disbursements listed in the disbursements journal must equal the total disbursements reported on this page. A bank reconciliation must be attached for each account. [See MOR-1CONTINUED]


ACCOUNT	FISCAL MAY 2010	CUMULATIVE FILING TO DATE ACTUAL (TOTAL OF ALL ACCOUNTS)
CASH BEGINNING OF MONTH (2)	83,236,000	5,158,000
RECEIPTS
CASH SALES	279,000	159,063,000
PROCEEDS FROM GORDON BROTHERS FOR LIQUIDATION GUARANTEE		99,709,000
TOTAL RECEIPTS	279,000	258,772,000
DISBURSEMENTS
MERCHANDISE	0	2,414,000
PAYROLL AND PAYROLL TAXES	2,061,000	42,916,000
RENT & OTHER OCCUPANCY	74,000	17,838,000
SALES & OTHER TAXES	227,000	24,867,000
SELLING, GENERAL & ADMINISTRATIVE	220,000	20,260,000
REVOLVER & BOND INTEREST	0	1,914,000
RESTRUCTURING PROFESSIONAL FEES INCLUDING LIQUIDATOR FEES, NET OF COMPANY'S SHARE OF AUGMENT GROSS MARGIN	569,000	6,949,000
LOAN REPAYMENTS TO GE & 2nd LIEN NOTE REPAYMENT	0	62,957,000
FUND LC COLLATERAL	0	3,451,000
TOTAL DISBURSEMENTS	3,151,000	183,566,000

NET CASH FLOW	(2,872,000)	75,206,000
(RECEIPTS LESS DISBURSEMENTS)	(2,872,000)	75,206,000

CASH – END OF MONTH (2)	80,364,000	80,364,000



THE FOLLOWING SECTION MUST BE COMPLETED
DISBURSEMENTS FOR CALCULATING U.S. TRUSTEE QUARTERLY FEES: (FROM CURRENT MONTH ACTUAL COLUMN)

TOTAL DISBURSEMENTS	FISCAL MAY 2010	CUMULATIVE FILING TO DATE ACTUAL (TOTAL OF ALL ACCOUNTS)
LESS: TRANSFERS TO OTHER DEBTOR IN POSSESSION ACCOUNTS	3,151,000	183,566,000
PLUS: ESTATE DISBURSEMENTS MADE BY OUTSIDE SOURCES (i.e. from escrow accounts)	0	0
TOTAL DISBURSEMENTS FOR CALCULATING U.S. TRUSTEE QUARTERLY FEES	3,151,000	183,566,000

1 - We track cash receipts and disbursements on a consolidated basis and not by individual bank accounts.
2 - Excludes add back of A/P Overdraft (GAAP adjustment) and credit card receivables.

FORM MOR-1

7/7/2010

Page 3 of 13

In re	Finlay Enterprises, Inc.				Case No.	09-14873 through 14880
	Debtor				Reporting Period:	May 2010

Cash Disbursements


DEBTOR	CASE NO.	FISCAL MAY 2010	CUMULATIVE FILING TO DATE ACTUAL

Finlay Enterprises, Inc.	09-14873		0
Finlay Fine Jewelry Corporation	09-14874	3,048,000	158,476,000
Finlay Jewelry, Inc.	09-14875		0
EFinlay, Inc.	09-14876		0
Finlay Merchandising & Buying	09-14877		553,000
Carlyle & Co. Jewelers	09-14878	103,000	22,544,000
Park Promenade, LLC	09-14879		0
L. Congress, Inc.	09-14880		1,993,000

Total		3,151,000	183,566,000

FORM MOR-1

7/7/2010

Page 4 of 13

In re	Finlay Enterprises, Inc.	Case No.	09-14873 through 14880
	Debtor	Reporting Period:	May 2010



STATEMENT OF OPERATIONS (Income Statement)
The Statement of Operations is to be prepared on an accrual basis. The accrual basis of accounting recognizes revenue
when it is realized and expenses when they are incurred, regardless of when cash is actually received or paid.


	FISCAL MAY 2010	CUMULATIVE - FILING TO DATE
REVENUE
Merchandise sales	0	273,999,000
Repair sales		3,763,000
Accomodation sales		17,000
Total Revenue	0	277,779,000
COST OF GOODS SOLD
Cost of Goods Sold	0	238,267,000
Gross profit before non recurring items	0	39,512,000
Non Recurring item: Adjustment to inventory valuation based on estimated net realizable value		300,000
Gross Profit	0	39,212,000
OPERATING EXPENSES
Net advertising expense		5,140,000
Rent & Other Occupancy	70,000	20,358,000
Payroll, payroll taxes and employee benefits	0	26,363,000
Insurance	0	1,773,000
Other general operating expenses (See below)	(261,000)	34,400,000
Other - including administrative cost centers (See below)	(323,000)	20,670,000
Total Operating Expenses Before Depreciation	(514,000)	108,704,000
Depreciation/Depletion/Amortization		748,000
Net Profit (Loss) Before Other Income & Expenses	514,000	(70,240,000)
OTHER INCOME AND EXPENSES
Other Income (attach schedule)		0
Interest Expense	7,000	10,895,000
Other Expense (attach schedule)		17,700,000
Net Profit (Loss) Before Reorganization Items	507,000	(98,835,000)
REORGANIZATION ITEMS
Professional Fees & Other reoganization expense (See below)	748,300	9,473,600
U. S. Trustee Quarterly Fees	(2,200)	149,225
Interest Earned on Accumulated Cash from Chapter 11		0
Gain (Loss) from Sale of Equipment		0
		0
Total Reorganization Expenses	746,100	9,640,825
Provision (Credit) for Income Taxes (1)		(8,132,419)
Net Profit (Loss)	(239,100)	(100,343,406)

(1) Year to date reflects income tax receivable resulting from carry back of loss for October 2009 tax year.

FORM MOR-2

7/7/2010

Page 5 of 13

In re	Finlay Enterprises, Inc.	Case No.	09-14873 through 14880
	Debtor	Reporting Period:	May 2010



BREAKDOWN OF “OTHER” CATEGORY	FISCAL MAY 2010	CUMULATIVE - FILING TO DATE
OTHER GENERAL OPERATIONAL EXPENSES
BOXES/DISPLAYS		459,000
EVENTS/SUPPLIES	0	374,000
TRAVEL		898,000
MISCELLANEOUS INCLUDING GORDON BROTHERS CONSULTANT TIME AND EXPENSE (1)	(268,000)	1,180,605
TRADENAMES, CUSTOMER LISTS & OTHER WRITE OFFS	0	24,051,549
TELECOMMUNICATION CHARGES	7,000	612,000
CREDIT CARD FEES	0	6,825,000

TOTAL OTHER OPERATIONAL EXPENSES	(261,000)	34,400,154

Note 1: Includes adjustment to certain reserves and net proceeds from sale of stock.

OTHER INCLUDING ADMINISTRATIVE COSTS CENTERS
PAYROLL (2)	(447,000)	10,159,000
PAYROLL TAXES	78,000	722,000
EMPLOYEE BENEFITS	12,000	569,000
VEBA TRUST - BENEFITS	0	1,500,000
RENT PREMISES	0	728,000
RENT EQUIPMENT	0	308,000
REPAIR & MAINTENANCE	0	190,000
UTILITIES	0	368,000
OTHER MISCELLANEOUS	34,000	6,126,000
		0
OTHER ADMINISTRATIVE EXPENSES	(323,000)	20,670,000


Note 2: Includes adjustment of $620K to certain reserves associated with severance and incentive payments.

PROFESSIONAL FEES & OTHER REORG. EXPENSE
WEIL, GOTSHAL & MANGES	136,300	2,075,800
ALVAREZ & MARSAL	32,400	1,551,700
ASSET DISPOSITION ASSOC.	146,900	1,727,100
GECC	0	375,100
PROSKAUER & ROSE	0	11,000
EPIQ BANKRUPTCY SOLUTIONS	75,000	1,045,900
HSBC BANK	8,300	48,900
PRYOR CASHMAN	10,000	392,800
MOSES & SINGER	(36,300)	905,300
SONNENSCHEIN, NATH & ROSENTHAL	5,000	138,200
TOGUT SEGAL	229,200	336,600
WILMINGTON TRUST COMPANY	5,000	69,900
CONSENSUS	68,500	513,000
OTHER	68,000	282,300
		0
TOTAL PROFESSIONAL FEES & OTHER REORG. EXPENSE	748,300	9,473,600


OTHER INCOME	N/A	N/A

OTHER EXPENSES	0	17,700,000

FORM MOR-2

7/7/2010

Page 6 of 13

In re	Finlay Enterprises, Inc.	Case No.:	09-14873 through 14880
	Debtor	Reporting Period:	May 2010


BALANCE SHEET
The Balance Sheet is to be completed on an accrual basis only. Pre-petition liabilities must be classified separately from post-petition obligations.


ASSETS	BOOK VALUE AT END OF CURRENT REPORTING MONTH (May 31, 2010)	BOOK VALUE ON PETITION DATE OR SCHEDULED (August 5, 2009)
CURRENT ASSETS
Unrestricted cash and equivalents (including A/P overdraft and credit card receivables)	80,392,375	5,352,405
Cash Collaterlized Accounts	1,561,975	6,841,822
Accounts receivable (Net)	126,114	14,963,712
Income tax receivable (1)	4,812,257	0
Other receivables (2)	3,492,129	1,028,900
Merchandise inventories	0	202,530,200
Prepaid expenses and other	0	1,950,201
Other Current Assets (attach schedule)	0	0
TOTAL CURRENT ASSETS	90,384,850	232,667,240
PROPERTY & EQUIPMENT
Land and building	3,225,000	9,420,470
Fixtures		17,794,766
Displays	0	2,508,324
Computers, equipment & other	0	5,257,757
Construction in Progress	0	2,893,959
Leasehold Improvements	0	4,162,237
Vehicles	0	16,520
Less: Accumulated Depreciation	0	(9,670,437)
TOTAL PROPERTY & EQUIPMENT (3)	3,225,000	32,383,596
OTHER ASSETS
Amounts due from Insiders*		0
Professional Retainers	929,084	751,863
Other Assets (attach schedule)	2,744,551	21,505,623
TOTAL OTHER ASSETS	3,673,635	22,257,486
TOTAL ASSETS	97,283,485	287,308,322

LIABILITIES AND OWNER EQUITY	BOOK VALUE AT END OF CURRENT REPORTING MONTH (May 31, 2010)	BOOK VALUE ON PETITION DATE OR SCHEDULED (August 5, 2009)
LIABILITIES NOT SUBJECT TO COMPROMISE (Postpetition)
Accounts Payable - Post petition	34,507	0
Wages Payable & Compensated Absences	170,000	0
Accrued Professional Fees & restructuring costs	1,504,709	0
Taxes Payable	0	0
Amounts Due to Insiders*	0	0
Deferred Revenue - Liquidator Guarantee Advance	0	0
Other Post-petition Liabilities (attach schedule)	2,294,029	0
TOTAL POST-PETITION LIABILITIES	4,003,245	0
LIABILITIES SUBJECT TO COMPROMISE (Pre-Petition)
Secured Debt -Revolver, 2nd & 3rd lien notes	194,112,290	255,832,879
Priority Debt	1,703,743	427,200
Unsecured Debt - Senior notes	42,895,031	42,847,826
Accounts Payable - Pre petition	8,169,770	8,176,582
Other Pre-petition Liabilities (attach schedule)	1,003,641	34,457,064
TOTAL PRE-PETITION LIABILITIES	247,884,475	341,741,551
TOTAL LIABILITIES	251,887,720	341,741,551
OWNERS' EQUITY
Capital Stock	117,054	117,054
Additional Paid-In Capital	96,716,915	96,716,915
Retained Earnings - Pre-Petition	(123,248,418)	(123,248,418)
Retained Earnings - Post-petition	(100,324,545)	0
Treasury Stock	(27,865,241)	(28,018,780)
Adjustments to Owner Equity (attach schedule)		0
NET OWNERS’ EQUITY	(154,604,235)	(54,433,229)
TOTAL LIABILITIES AND OWNERS' EQUITY	97,283,485	287,308,322
*"Insider" is defined in 11 U.S.C. Section 101(31).

1. Reflects federal income tax receivable resulting from carry back of loss for October 2009 tax year
2. Includes approximately $1.7 million due from liquidator for percent rent and reimbursement of certain expenses.
3. These assets have been adjusted to our estimated net realizable values.

FORM MOR-3

7/7/2010

Page 7 of 13

In re	Finlay Enterprises, Inc.	Case No.:	09-14873 through 14880
	Debtor	Reporting Period:	May 2010


BALANCE SHEET - continuation section
ASSETS	BOOK VALUE AT END OF CURRENT REPORTING MONTH (May 31, 2010)	BOOK VALUE ON PETITION DATE OR SCHEDULED (August 5, 2009)

Other Assets
Deferred financing fees		8,895,950
Insurance deposit	340,000	340,000
Credit card deposit	2,388,403	3,000,000
Favorable leases	0	623,908
Customer lists	0	172,328
Trade names	0	6,669,592
Deposits- Other utilities	0	239,975
Other - Workers Comp Deposit	16,148	120,800
Other (CSV Life - Carlyle)		1,443,070
Total Other Assets	2,744,551	21,505,623


LIABILITIES	BOOK VALUE AT END OF CURRENT REPORTING MONTH (May 31, 2010)	BOOK VALUE ON PETITION DATE OR SCHEDULED (August 5, 2009)
Other Post-petition Liabilities
General Insurance	98,912	0
Medical Insurance	88,146	0
Layaways & Gift Card	0	0
Credit Card Accrual	0	0
Percent Rent Accrual	2,058,755
Other Post-petition Liabilities	48,216
Other Post-petition Liabilities	2,294,029	0


LIABILITIES	BOOK VALUE AT END OF CURRENT REPORTING MONTH (May 31, 2010)	BOOK VALUE ON PETITION DATE OR SCHEDULED (August 5, 2009)
Other Pre-petition Liabilities
General Insurance	656,422	6,364,144
Medical Insurance	88,145	1,203,249
Layaways & Gift Card	0	1,418,612
Diamond Bond Liability	0	300,000
STL Rent and Rent related	0	4,194,864
Income Taxes	127,500	646,257
Accrued Credit Card	0	81,756
Returns Reserve	0	546,362
Severance & other payroll accrual	0	6,775,876
Compensated Absences accrual	0	1,390,067
Accured Liability - Split Payroll	0	1,632,890
Other Miscellaneous	0	3,033,698
Sundry Taxes Accrued	131,574	6,869,289
Other Pre-petition Liabilities	1,003,641	34,457,064

FORM MOR-3

7/7/2010

Page 8 of 13

In re	Finlay Enterprises, Inc.	Case No.	09-14873 through 14880
	Debtor	Reporting Period:	May 2010

SUMMARY OF UNPAID POST-PETITION DEBTS

	Number of Days Past Due
	Current	0-30	31-60	61-90	Over 91	Total
Accounts Payable	34,507
Wages Payable	170,000
Taxes Payable	0
Rent/Leases-Building
Rent/Leases-Equipment
Secured Debt/Adequate Protection Payments
Professional Fees	1,504,709
Amounts Due to Insiders
Other:	2,294,029
Other:
Total Post-petition Debts	4,003,245

FORM MOR-4

7/7/2010

Page 9 of 13

In re: Finlay Enterprises, Inc.

Case No. 09-14873 through 14880



UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK


MONTHLY OPERATING REPORT – MAY 2010




MOR- 4 - Post Petition Taxes Certification

The undersigned verifies that, to the best of his knowledge, all undisputed post-petition tax obligations, including but not limited to payroll, sales, use, income, franchise and other taxes have been paid to the proper taxing authority when due.




/s/ Bruce E. Zurlnick				July 7, 2010
Bruce E. Zurlnick
Senior Vice President,
Treasurer and CFO

MOR 4

7/7/2010

Page 10 of 13

In re	Finlay Enterprises, Inc.	Case No.	09-14873 through 14880
	Debtor	Reporting period:	May 2010

PAYMENTS TO INSIDERS AND PROFESSIONALS

Of the total disbursements shown on the Cash Receipts and Disbursements Report (MOR-1) list the amount paid to insiders (as defined in Section 101(31) (A)-(F) of the U.S. Bankruptcy Code) and to professionals. For payments to insiders, identify the type of compensation paid (e.g. Salary, Bonus, Commissions, Insurance, Housing Allowance, Travel, Car Allowance, Etc.). Attach additional sheets if necessary.

INSIDERS
NAME	TYPE OF PAYMENT	Fiscal May 2010	TOTAL PAID TO DATE
Arthur E. Reiner	Salary	0.00	125,625.00
Arthur E. Reiner	Vacation	0.00	40,586.53
Arthur E. Reiner	Director Fees	6,250.00	21,833.34
Arthur E. Reiner	Expense reimbursement	0.00	5,000.00
Bonni G. Davis	Salary	17,853.34	169,883.12
Bonni G. Davis	Severance	43,133.64	43,133.64
Bonni G. Davis	Vacation	14,008.00	14,008.00
Bonni G. Davis	Incentive Payments	129,835.92	129,835.92
Bonni G. Davis	Expense reimbursement	18.00	18.00
Bruce E. Zurlnick	Salary	36,750.00	274,953.18
Bruce E. Zurlnick	Severance	43,133.64	43,133.64
Bruce E. Zurlnick	Vacation	17,809.61	17,809.61
Bruce E. Zurlnick	Incentive Payments	335,035.92	335,035.92
Bruce E. Zurlnick	Expense reimbursement	281.69	2,859.84
David B. Cornstein	Director Fees	6,250.00	25,663.97
Deborah A. Higgins	Salary	0.00	20,869.79
Deborah A. Higgins	Consulting	0.00	28,000.00
Deborah A. Higgins	Vacation	0.00	7,767.36
Deborah A. Higgins	Expense reimbursement	0.00	366.16
Douglass J. Congress	Vacation	0.00	8,461.53
Douglass J. Congress	Expense reimbursement	0.00	334.95
Douglass J. Congress	Severance	0.00	45,305.99
James M. Giantonemico	Salary	0.00	142,182.14
James M. Giantonemico	Expense reimbursement	0.00	3,947.78
James M. Giantonemico	Vacation	0.00	3,330.00
James M. Giantonemico	Severance	0.00	48,327.20
James M. Giantonemico	Incentive Payments	50,457.35	259,785.80
Joan M. Durkin	Salary	0.00	43,852.85
Joan M. Durkin	Vacation	0.00	2,536.05
Joan M. Durkin	Expense reimbursement	0.00	50.14
John P.Orr	Salary	0.00	136,951.32
John P.Orr	Severance	53,698.95	65,306.81
John P.Orr	Incentive Payments	118,514.83	118,514.83
John P.Orr	Consulting	1,500.00	3,239.41
John P.Orr	Expense reimbursement	0.00	714.30
Joseph M. Melvin	Expense reimbursement	0.00	416.67
Joseph M. Melvin	Severance	0.00	45,305.99
Joyce Manning Magrini	Salary	0.00	63,822.83
Joyce Manning Magrini	Vacation	0.00	17,394.22
Joyce Manning Magrini	Expense reimbursement	0.00	291.25
Karin Knudsen	Salary	0.00	149,110.02
Karin Knudsen	Vacation	0.00	22,712.50
Karin Knudsen	Incentive Payments	0.00	128,168.80
Karin Knudsen	Severance	0.00	43,133.64
Karin Knudsen	Expense reimbursement	0.00	5,200.38
Leon Benzrihem	Salary	0.00	65,180.84
Leon Benzrihem	Vacation	0.00	11,000.00
Leon Benzrihem	Incentive Payments	0.00	20,428.70
Leon Benzrihem	Severance	0.00	36,224.80
Leon Benzrihem	Expense reimbursement	0.00	1,450.00
Louis Lipschitz	Director Fees	0.00	27,333.32
Norma L. Wilson	Salary	0.00	106,589.48
Norma L. Wilson	Vacation	0.00	19,291.72
Norma L. Wilson	Incentive Payments	35,025.36	182,686.80
Norma L. Wilson	Severance	0.00	71,096.74
Norma L. Wilson	Expense reimbursement	0.00	12,070.76
Norman S. Matthews	Director Fees	0.00	40,537.64
Raymond J. Poulin	Salary	9,666.66	91,929.84
Raymond J. Poulin	Vacation	8,476.92	8,476.92
Raymond J. Poulin	Severance	21,561.36	21,561.36
Raymond J. Poulin	Incentive Payments	99,115.96	99,115.96
Richard G. Davenport	Salary	0.00	23,728.92
Richard G. Davenport	Vacation	0.00	2,056.15
Richard G. Davenport	Severance	0.00	27,415.38
Ronald E. Swanson	Salary	0.00	70,415.07
Ronald E. Swanson	Severance	12,088.86	20,624.02
Ronald E. Swanson	Incentive Payments	13,292.08	66,463.90
Ronald E. Swanson	Vacation	0.00	7,980.37
Ronnie S. Grabon	Salary	0.00	38,728.06
Ronnie S. Grabon	Incentive Payments	0.00	26,955.51
Ronnie S. Grabon	Severance	8,024.33	13,689.79
Ronnie S. Grabon	Vacation	0.00	980.83
Scot M. Congress	Vacation	0.00	12,692.30
Scot M. Congress	Severance	0.00	45,306.00
Scot M. Congress	Expense reimbursement	0.00	2,467.07
Stuart C. Mclean	Expense reimbursement	0.00	136.42
Stuart C. Mclean	Severance	0.00	22,500.00
Sue C. Haire	Salary	0.00	45,453.30
Sue C. Haire	Vacation	0.00	9,387.66
Sue C. Haire	Incentive Payments	0.00	17,327.50
Sue C. Haire	Severance	2,980.30	17,296.30
Thomas G. Lozier	Salary	0.00	10,574.50
Thomas G. Lozier	Vacation	0.00	16,061.77
Thomas G. Lozier	Severance	0.00	62,884.61
Thomas G. Lozier	Expense reimbursement	0.00	71.45
Thomas M. Murnane	Director Fees	7,500.00	31,623.65
			-
TOTAL PAYMENTS TO INSIDERS		1,092,262.72	4,072,575.83

FORM MOR-6

7/7/2010

Page 11 of 13

In re	Finlay Enterprises, Inc.	Case No.	09-14873 through 14880
	Debtor	Reporting period	May 2010

PROFESSIONALS MAY 2010
	PERIOD COVERED	DATE OF COURT ORDER AUTHORIZING PAYMENT	AMOUNT PAID	TOTAL PAID TO DATE	TOTAL ESTIMATED INCURRED & UNPAID*
Weil, Gotshal & Manges LLP			99,500	1,225,100	401,100
Alvarez & Marsal			32,400	1,246,600	0
Asset Disposition Advisors			171,700	1,121,000	310,400
Epiq Bankruptcy Solutions LLC			97,600	801,700	75,000
Consensus Advisors			20,200	396,000	117,100
Moses & Singer			11,000	798,900	106,400
Pryor Cashman			32,900	374,400	18,400
GECC			0	25,500	15,000
Sonnenschein			0	133,600	15,000
Wilmington Trust			0	15,000	55,000
HSBC			3,400	39,200	5,000
US Trustee Fees			0	138,700	10,000
Togut & Segal LLP			8,000	26,000	312,300
CRG Partners Group LLC			4,000	192,300	12,000
Other			0	183,100	52,000
TOTAL PAYMENTS TO PROFESSIONALS			480,700	6,717,100	1,504,700
* INCLUDES ALL FEES INCURRED, BOTH APPROVED AND UNAPPROVED. REPRESENTS ESTIMATES FOR CURRENT MONTH.

POST-PETITION STATUS OF SECURED NOTES, LEASES PAYABLE
AND ADEQUATE PROTECTION PAYMENTS - MAY 2010

NAME OF CREDITOR	SCHEDULED MONTHLY PAYMENT DUE	AMOUNT PAID DURING MONTH
Second Lien Note repayment	n/a	0







TOTAL PAYMENTS		0

FORM MOR-6

7/7/2010

Page 12 of 13

In re	Finlay Enterprises, Inc.	Case No.	09-14873 through 14880
	Debtor	Reporting Period:	May 2010

	DEBTOR QUESTIONNAIRE

	Must be completed each month. If the answer to any of the questions is “Yes”, provide a detailed explanation of each item. Attach additional sheets if necessary.	Yes	No
1	Have any assets been sold or transferred outside the normal course of business this reporting period?		X (1)
2	Have any funds been disbursed from any account other than a debtor in possession account this reporting period?		X
3	Is the Debtor delinquent in the timely filing of any post-petition tax returns?		X
4	Are workers compensation, general liability or other necessary insurance coverages expired or cancelled, or has the debtor received notice of expiration or cancellation of such policies?		X
5	Is the Debtor delinquent in paying any insurance premium payment?		X
6	Have any payments been made on pre-petition liabilities this reporting period?	X (2)
7	Are any post petition receivables (accounts, notes or loans) due from related parties?		X
8	Are any post petition payroll taxes past due?		X
9	Are any post petition State or Federal income taxes past due?		X
10	Are any post petition real estate taxes past due?		X
11	Are any other post petition taxes past due?		X
12	Have any pre-petition taxes been paid during this reporting period?	X (2)
13	Are any amounts owed to post petition creditors delinquent?		X
14	Are any wage payments past due?		X
15	Have any post petition loans been received by the Debtor from any party?		X
16	Is the Debtor delinquent in paying any U.S. Trustee fees?		X
17	Is the Debtor delinquent with any court ordered payments to attorneys or other professionals?		X
18	Have the owners or shareholders received any compensation outside of the normal course of business?		X

	1 - Effective September 26, 2009, the debtors signed an agency agreement with Gordon Brothers Retail Partners, LLC to guarantee the sale proceeds of the liquidation of merchandise in certain of our store locations.
	2 - The debtors obtained certain orders on or shortly after the commencement of these chapter 11 cases designed to minimize the disruption of business operations. Such orders gave the Debtors permission to pay certain prepetition amounts related to employee compensation programs, certain customer programs, sales and use taxing authorities, workers' compensation and other insurance programs and certain common carriers. During the period reported herein, the Debtors paid certain prepetition obligations under such orders.

FORM MOR-7

7/7/2010

Page 13 of 13

Due to their voluminous nature, these documents are not attached but are available from the Debtors upon request.

The Debtor does not have the ability to age the Accounts Payble data and therefore just the total amount due to each creditor is included.

Accounts Receivable is comprised of a $1.3 million receivable from Gottschalk's for which we have set up an uncollectible reserve of 90%, as Gottschalk's filed for bankruptcy in January 2009.

Not applicable.

Note: The debtor's fiscal month of May 2010 covers the period from May 2, 2010 through May 31, 2010.