Yannis Bilquez, the French financier based in Switzerland who took over Charles Jourdan in October 2005, was arrested and imprisoned earlier this week by the order of a Swiss deputy prosecutor investigating claims of fraudulent management by numerous investors who entrusted their funds to his financial services company, Avendis Capital. Several funds managed by Avendis, generally located in fiscal paradises like the Cayman Islands, have been liquidated under the shock of the sub-prime credit squeeze in the USA.

The legal proceedings around Bilquez are blocking the sale of Charles Jourdan to new owners, suddenly precipitating the specter of a possible liquidation of the famous French footwear brand. The French court in Romans that placed Jourdan under bankruptcy protection last September adjourned a previously scheduled session yesterday where it was going to select one of three candidates who have presented bids for the acquisition of the company.

A favorite in the race was Jean-Marc Gaucher, the former Reebok executive who has turned over Repetto. He wanted to get its increasingly sophisticated danced-inspired shoes made by Jourdan in Romans, starting with some 30,000 pairs a year, although he wanted to retain only 76 of its 212 employees in France. Gaucher was proposing to keep all the Jourdan stores in Europe while reducing its French manufacturing operations to the assembly of the shoes.

He had the backing of governmental authorities and of some managers of Jourdan, but he withdrew his offer because he was unsure to be able to secure ownership of the actual Charles Jourdan brand. Bilquez has apparently held in escrow some debt related to his financial assets against the rights to the brand, which he owned through a separate company.

Another candidate to the acquisition, Omniscent, has suspended its offer for one week while waiting for further information, including the possibility to get the rights to the brand for the USA from BBC International, to which Bilquez had sold them last year. This company is a fund set up by Kathy Hilton, mother of Paris Hilton and heir to the fortune of the Hilton Hotels, who is considering the launch of a line associating her own name with that of Jourdan.

Omniscent business plan contemplates a production level of 60,000 pairs a year at Romans, one-third of which would be made for an American group under other names. The fund has offered to pay the November salaries of Jourdan’s employees in France and to preserve 143 jobs, keeping most of the manufacturing operations and closing down four stores. It would create a new company with equity of €2.5 million for the assets, not including the rights to the brand.

A third candidate was Christophe Lambert, the French actor behind the Highlander movie, but it’s not sure whether he is maintaining his offer under the present circumstances. He has other holdings in different sectors, including pre-cooked foods.

Charles Jourdan had a loss of more than €7 million on sales of €11.3 million in 2006.