Create and delete folders using the icons in the bar at the top of the screen, or use the Edit menu and select New Folder. You can build multiple layers of folders in a hierarchical structure.
You can drag and drop references from All Documents into a folder. The reference will also remain in All Documents.
If you remove a reference from a folder, the reference can still be found under All Documents.
Do not drag and drop your references to Trash if you want to remove it from a folder as this will delete the reference from your library. To remove a reference from a folder, right click on the reference and select Remove from Folder.