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KBC Questions Exelco’s US Bankruptcy Move
Nov 1, 2017 5:00 AM
By Rapaport News
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RAPAPORT... 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
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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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