Wilmington, Del.–Exelco NV, the diamond company co-owned by master cutter Jean-Paul Tolkowsky, has filed for Chapter 11 bankruptcy protection.
Antwerp-based Exelco NV and FTK Worldwide Manufacturing BVBA, along with U.S.-based affiliates Exelco North America and Ideal Diamond Trading USA, filed on Sept. 26 in U.S. Bankruptcy Court in Delaware, listing up to $100 million in liabilities, court papers show.
The filing follows Exelco losing its status as a De Beers sightholder in April and lender KBC Group NV seizing goods from Exelco’s office in Antwerp over the summer in an effort to recover some of the money it’s owed.
An Antwerp court later ruled that KBC had to return the goods because Exelco was on track to repay its loans, but the company’s U.S. bankruptcy filing shows that the bank isn’t giving up.
According to court documents, Exelco originally filed the rough equivalent of Chapter 11 in Belgium but then withdrew that and filed in the United States, informing KBC of what it had done.
Despite this, court documents state, KBC continued to pursue legal action in Belgium that would allow it to seize and liquidate Exelco NV’s assets.
Exelco filed a motion for a temporary restraining order, invoking protections afforded under U.S. bankruptcy to block KBC’s actions overseas.
A U.S. bankruptcy court judge granted the TRO Friday, in an order that states in part that KBC is enjoined from “seeking to seize and/or liquidate [Exelco’s] assets and from further attempts to use the Act on the Continuity of Enterprises in Belgium or other legal proceedings to seize and/or liquidate [Exelco’s] assets. KBC is hereby directed to immediately withdraw all pending requests for relief against the debtors or their assets in the Antwerp Commercial Court (and any other court).”
A spokesperson for KBC said the company cannot comment on the case, as it is a pending legal issue involving a client.
Neither Exelco nor the attorney listed as representing it in the case, Wilmington, Delaware-based Michael R. Nestor, responded to request for comment.
Documents filed in U.S. Bankruptcy Court list Exelco NV’s creditors as numbering between 50 and 99, and puts its assets at $10 to $50 million.
According to a filing made by the company in Belgium and cited by Bloomberg, among the company’s biggest creditors are KBC and another former diamond industry lender, Standard Chartered Plc, which are owed $15 million and $35 million, respectively.
The largest unsecured creditors include a number of Antwerp-based diamond companies, like Eurostar Diamond Traders, Trau Bros. NV and N. Shah & Co. BVBA, as well as Rosy Blue Sales Ltd. in Israel and Mahendra Brothers in India, according to U.S. court documents.
Tolkowsky, a member of the family of famous diamond cutters, started Exelco in 1993 with Leon and Lior Kunstler.
The company is a mid-stream supplier of diamonds, buying rough from miners and then cutting, polishing and/or setting the stones and selling them to retail jewelers.
Among the company’s clients is Signet Jewelers Ltd., which carries Tolkowsky-branded collections at its Kay Jewelers and Jared the Galleria of Jewelry chains.