Folli Follie may seek protection from creditors abroad

Troubled luxury jewelry firm Folli Follie Group (FFG) is reportedly seeking judicial protection from its creditors abroad in order to manage the restructuring of loans that have been issued outside of Greece.

The idea gained momentum after the termination of a loan agreement by a foreign creditor, which was accompanied by the forfeiture of a relevant letter of guarantee of the Athens-listed company on August 8, valued at 20 million euros.

This loan has the legal form of a Schuldschein, meaning that it is governed by German law. Folli has another such contract totaling 31 million euros.

The prospect has alarmed Greek banks, which were previously caught unaware when the company, without informing its creditors, entered the pre-bankruptcy process in July, in an effort to protect its assets. Its case will be heard on September 12 in Athens.

According...