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KBC Questions Exelco’s US Bankruptcy Move

Nov 1, 2017 5:00 AM   By Rapaport News
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KBC Bank has sought to prevent Exelco NV from continuing Chapter 11 bankruptcy proceedings in the US, claiming that the case belongs in Belgium, according to court documents. 

Exelco NV, an Antwerp-based diamond manufacturer that owes money to KBC, filed its voluntary petition for bankruptcy protection in Delaware on September 26. The firm listed estimated liabilities of $50 million to $100 million.

Exelco’s US filing triggered an “automatic stay,” meaning creditors became unable to collect on any debts the company had. However, KBC has asked the US Bankruptcy Court in Delaware to let it pursue its rights in Belgium, where it is already engaged in legal proceedings with Exelco, the bank said in an October 20 statement.

Belgium courts recently issued an order putting Exelco into administration, KBC said. That order “was based on a finding that the directors and officers [of Exelco] were purposefully not acting in the best interests of the company and its creditors,” it continued.

“It is clear that the Belgian judiciary wants to and is able to adjudicate this purely Belgian dispute,” the lender argued.

In June, Exelco defaulted on a loan from KBC secured by collateral that was located in Belgium and governed by Belgian law, the bank explained. As a result, a number of judicial proceedings to resolve the dispute began in Belgian courts, KBC pointed out. When Exelco’s reorganization attempts failed, the company “fled” to Wilmington, Delaware, to initiate Chapter 11, the lender alleged.

Exelco and its affiliate, FTK Worldwide Manufacturing BVBA, “having chosen to litigate initially in Belgium, found themselves in disadvantageous litigation postures there,” prompting their decision to file in the US, the bank continued.

However, Kris Cuyvers, Exelco’s chief restructuring officer, defended the Antwerp firm’s choice of jurisdiction in an October 20 statement to the court, arguing that “the United States offers a forum that will allow us to achieve our global restructuring goals.”

Image: MADe
Tags: Antwerp, bankruptcy, Belgium, chapter 11, Delaware, exelco, Exelco NV, FTK Worldwide Manufacturing BVBA, Kris Cuyvers, Rapaport News, US Bankruptcy Court, Wilmington
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