diff --git a/mozilla/mailnews/imap/src/nsImapMailFolder.cpp b/mozilla/mailnews/imap/src/nsImapMailFolder.cpp
index 3254e8bc88e..e8a591c6adf 100644
--- a/mozilla/mailnews/imap/src/nsImapMailFolder.cpp
+++ b/mozilla/mailnews/imap/src/nsImapMailFolder.cpp
@@ -222,8 +222,6 @@ nsImapMailFolder::nsImapMailFolder() :
   m_appendMsgMonitor = nsnull;  // since we're not using this (yet?) make it null.
   // if we do start using it, it should be created lazily
   
-  nsresult rv;
-  
   m_thread = do_GetCurrentThread();
   m_moveCoalescer = nsnull;
   m_boxFlags = 0;
@@ -334,13 +332,15 @@ NS_IMETHODIMP nsImapMailFolder::AddSubfolder(const nsAString& aName,
   nsCAutoString uri(mURI);
   uri.Append('/');
   
-  // convert name to imap modified utf7, like an imap server would
-  nsCAutoString utfFolderName;
-  rv = CopyUTF16toMUTF7(PromiseFlatString(aName), utfFolderName);
+  // If AddSubFolder starts getting called for folders other than virtual folders, 
+  // we'll have to do convert those names to modified utf-7. For now, the account manager code
+  // that loads the virtual folders for each account, expects utf8 not modified utf-7. 
+  nsCAutoString escapedName;
+  rv = NS_MsgEscapeEncodeURLPath(aName, escapedName);
   NS_ENSURE_SUCCESS(rv, rv);
   
-  uri += utfFolderName.get();
-  
+  uri += escapedName.get();
+    
   nsCOMPtr <nsIMsgFolder> msgFolder;
   rv = GetChildWithURI(uri.get(), PR_FALSE/*deep*/, PR_TRUE /*case Insensitive*/, getter_AddRefs(msgFolder));  
   if (NS_SUCCEEDED(rv) && msgFolder)