Charles and Colvard Files Chapter 11 With $10.5 Million Debt

Charles & Colvard, Ltd., the Research Triangle Park, North Carolina–based maker of the Forever One moissanite line, filed a voluntary Chapter 11 petition in the U.S. Bankruptcy Court for the Eastern District of North Carolina, with filings and a company press release dated March 2–3, 2026. The petition as reported lists $19.2 million in total assets and $10.5 million in debts, though a market summary also characterized both assets and liabilities in the $1 million to $10 million range.

Executive board chair Michael R. Levin framed the filing as a deliberate restructuring move. Levin said in the company statement that, "After thoroughly evaluating our alternatives and considering recent events and the market pressures facing our industry, the company’s board of directors decided that a court-supervised process is the best path forward to make the changes needed to ensure Charles & Colvard’s long-term success." Levin’s court declaration, filed March 3, adds that the business was hurt by the lab diamond boom and that "inflation, economic headwinds, and an evolving competitive landscape have [also] negatively impacted the jewelry and gemstone industry in recent years."

The company’s Form 8-K press release, filed as Exhibit 99.1 on March 3, 2026, states Charles & Colvard is initiating "a comprehensive restructuring of the Company to better position the business for long-term success" and that it intends to use Chapter 11 to obtain "tools, time, and flexibility to engage in discussions with creditors and other parties in interest to implement a financial and operational transformation of the Company." The press release also says the company will file customary motions to enable it to conduct business as usual during the restructuring process.

Charles & Colvard arrives in bankruptcy after a year of public turbulence. JCK and company filings note a 2025 delisting from Nasdaq, a proxy battle involving activist Riverstyx Fund with which Levin was affiliated, and legal disputes with lender Ethara Capital and primary supplier Wolfspeed. JCK observed the irony that a company early to lab-grown gemstones would be squeezed by a lab diamond boom; Wolfspeed itself "entered, and exited, Chapter 11 last year," according to JCK.

Management shifts preceded the filing: Marketscreener records the termination of CEO Don O'Connell effective January 5, 2026, and the December 5, 2025 resignation of director Neal Goldman. Marketscreener further lists the debtor’s reported legal counsel as Rebecca Redwine Grow, Lydia C. Carpenter, Jason L. Hendren, and Benjamin E.F.B. Waller of Hendren, Redwine & Malone, PLLC. The company’s OTC stock showed sharp intraday movement on March 5, 2026, with a quoted price of $0.0700, up 40.00% at the market snapshot time.

The filing lays out explicit risk points for the Chapter 11 process, citing potential impacts on liquidity and the availability of operating capital, objections or third-party motions that could protract the case, court rulings, and "employee attrition and the Company’s ability to retain senior" as areas of concern. In the near term, Charles & Colvard will pursue court-supervised negotiations with creditors while pressing motions to continue operations as it designs a restructuring plan.