Folli Follie has lost its protection from creditors following a decision by an Athens court last Friday. The troubled jewelry maker’s legal team is reportedly planning either to appeal or to sidestep the decision by submitting a new application to have its streamlining plan approved. These options have the approval of the group’s chief restructuring consultant and its bondholders, and possibly the support of Chinese stakeholder Fosun.
The new development came as Folli Follie was struggling with an already difficult situation, with liquidity running dry and unexpected confiscations from both the group and five board members ordered by an Athens court following an application by three investors and a foreign company.
This followed the rejection of the injunction Folli Follie had applied for during its streamlining process, leading to the company losing its protection from creditors. The reasons cited were the fact that one of the creditors signing the application was in fact a subsidiary of the group, the insufficient financial data submitted, and the fake figures the Alvarez & Marsal investigation has found in the group’s financial reports.
Legal sources say a new application would probably stand a greater chance of success.