A team from Heuking Kühn Lüer Wojtek's Munich office legally advised TCH GmbH, the majority shareholder of publicly listed centrotherm photovoltaics AG, in connection with the insolvency plan procedure at the company. In addition to various matters of stock corporation law and capital market law as well as insolvency law, the advice also covered matters in connection with the existing trademark portfolio.
centrotherm photovoltaics AG is a worldwide leading technology and equipment provider for the photovoltaics industry. The company equips solar enterprises with turnkey manufacturing plants for the production of silicon, solar cells and solar modules. Due to the difficult situation in the solar industry, the company found itself in a financially strained situation. The company's executive board reacted by assembling an experienced restructuring team and initiated a protective umbrella proceeding under Section 270 German Insolvency Code in the summer of last year. This instrument that has only been available since March 2012 allows a company prior to an impending insolvency to draw up an insolvency plan in cooperation with creditors and thus to create the conditions for a successful corporate reorganization. centrotherm photovoltaics AG is one of the first companies making use of this possibility in Germany.
It was a further characteristic that the centrotherm photovoltaics AG shareholders do not lose all shares due to the insolvency plan, but their holdings in the company are maintained to a reduced extent. Previously, it had been customary for shareholders to lose their investment entirely in an insolvency. In this case, however, the shareholders remain participants, thus also allowing the stock exchange quotation of the shares to be maintained. At the same time, the creditors are also receiving shares of the company, held in trust by an administrative company, by means of a capital cut with subsequent inclusion of their receivables as part of a debt-to-equity swap.
The insolvency plan provides for the centrotherm group to be restructured and reorganized by the end of 2015 at the latest. After successful reorganization, the administrative company is to then sell the shares and to submit the proceeds to the creditors. The objective is a complete satisfaction of all creditor claims. At the same time, the company will be granted debt relief and both creditors and existing shareholders will have the opportunity to benefit from a positive business development. In addition, the jobs of the currently about 1,000 employees will be saved.
"For all parties involved, the solution that was found represents a substantial improvement as compared to a regular insolvency that would have been impending without plan proceeding. The example of centrotherm shows that the new regulations create more room to maneuver in finding the respective tailor-made solution in the case of corporate crisis," summarized Munich-based partner Boris Dürr, who led the transaction on behalf of Heuking Kühn Lüer Wojtek.
Counsel to TCH GmbH:
Heuking Kühn Lüer Wojtek, Munich
Boris Dürr (Lead, M&A/Corporate)
Dr. Ulrike Helkenberg (Trademark Law)
Dr. Stephan Degen (Bankruptcy Law)
Alice Ballwieser (M&A/Corporate)