Exelco’s US Chapter 11 Case Dismissed in Favor of Belgian Proceeding

January 18, 2018

The Delaware Bankruptcy Court recently dismissed a Chapter 11 bankruptcy case pending before it and recognized, under Chapter 15 of the Bankruptcy Code, the debtor’s bankruptcy proceeding in Belgium. Exelco NV (“Exelco”), a Belgian diamond distributor, owed KBC Bank NV (“KBC”) approximately US$14 million. KBC’s debt was secured by a pledge on essentially all of Exelco’s assets. Exelco’s debt was also guaranteed by an affiliated company and certain individuals. When Exelco defaulted on its debt obligations, KBC commenced a sort of involuntary insolvency proceeding in Belgium. Exelco then commenced a Chapter 11 case in Delaware, setting the stage for an international bankruptcy cross border jurisdictional dispute.

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