On Dec. 13, a federal judge dismissed the Chapter 11 filing of Exelco North America and six related companies—which means that any case concerning the company will now likely be heard in Belgium.
The judge, Kevin Gross, did not give a reason for his decision.
Exelco North America and four related companies first filed for Chapter 11 in Delaware bankruptcy court on Sept. 26. However, several parties objected to the Belgian company’s decision to hear its case in a U.S. bankruptcy court. Main creditor KBC Bank argued that the bankruptcy proceedings were already underway for the former sightholder in Belgium. The bank was soon joined in opposition by the two Belgian trustees-in-residence overseeing the Exelco case.
Those two trustees, Frans De Roy and Benny Goosens, said in a court filing that they object to any fire sale of the company’s assets, saying they preferred to enlist local diamond experts to value its gems.
They also disclosed that the Antwerp public prosecutor is undertaking a criminal investigation of the once-prominent firm.
“The public prosecutor has strong indications of embezzlement in the assets of Exelco NV,” said a document included with the trustees’ filing, attributed to assistant district attorney Stef De Decker.
One issue that the Prosecutor is looking at involves a “lot of diamonds of unknown very significant worth that is missing from Exelco’s headquarters due to a possible improper shipment abroad,” the papers said.
Exelco could not be reached for comment at press time.
The decision also affects the Chapter 11 filings of Exelco NV, FTK Worldwide Manufacturing, Ideal Diamond Trading USA, Ideal Diamond Trading Limited, Exelco Asia Limited, and Exelco International Limited.
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