State of Baden-Württemberg transfers Abellio Baden-Württemberg GmbH’s business operations to state subsidiary SWEG assisted by Heuking

The state of Baden-Württemberg is taking over insolvent Abellio Baden-Württemberg GmbH. The parties signed a contract to that effect with state-owned Südwestdeutsche Landesverkehrs-AG (SWEG) in Stuttgart last week. The state of Baden-Württemberg and SWEG were assisted in the takeover by a Heuking team led by Dr. Ute Jasper, Dr. Christopher Marx, and Prof. Dr. Georg Streit. The purchase price is in excess of EUR 5 million. The transaction, expected to be concluded by year-end, is subject to the approval of the creditors’ meeting.

According to Transport Minister Winfried Hermann, the takeover is the best solution: “Jobs will be preserved and passengers can count on reliable operations.” SWEG CEO Tobias Harms considers it self-evident that the state-owned company is taking responsibility in this crisis.

Invitations to bid on the routes operated by Abellio are to be issued within the next two years, a model developed by Heuking procurement experts Jasper and Marx. SWEG will then also be able to participate in the procedure.

“The takeover by SWEG concludes an uncertain phase in Baden-Württemberg. Jointly with the state, we are now in a position to prepare a fair and transparent award procedure,” said Dr. Ute Jasper. “Having already successfully negotiated two continuation agreements with Abellio last month, we are pleased to present another success that offers long-term perspectives for passengers and employees alike,” Dr. Christopher Marx pointed out. Insolvency law specialist Prof. Dr. Georg Streit added: “The state of Baden-Württemberg and SWEG used all options under insolvency law to implement the best solution for safe local transport in Baden-Württemberg.”

Abellio, a subsidiary of the Dutch state railroads (Nederlandse Spoorwegen), was in financial difficulties and has been subject to protective shield proceedings since June 2021. Abellio Rail Baden-Württemberg GmbH, a subsidiary of Abellio, employs more than 360 people.

In October 2021, the Heuking team had negotiated two continuation agreements with transport associations Verkehrsverbund Rhein-Ruhr (VRR), Nahverkehr Westfalen-Lippe (NWL), Nahverkehr Rheinland (NVR), the state of Baden-Württemberg, and Abellio group, which had initially ensured transportation on the lines operated by Abellio.

Heuking Kühn Lüer Wojtek‘s “Public Sector & Public Procurement” department has been one of the market leaders in public procurement law for years. Its lawyers hold top spots in German and international lawyer rankings. Since 1991, they have advised on awards, restructuring, large-scale projects, and cooperations in the public sector and have accompanied several hundred large-scale projects of federal, state, and local authorities and their subsidiaries with a total volume in excess of EUR 40 billion without any procedure having been successfully challenged to date.

Dr. Ute Jasper is one of the most renowned lawyers for procurement and infrastructure projects in the public sector. She advises federal and state ministries, municipalities, and businesses, particularly on innovative and complex projects. Ute Jasper heads Heuking Kühn Lüer Wojtek's “Public Sector & Public Procurement” department. For years, she has been ranked number 1 with her team in JUVE Handbook of Commercial Law Firms. According to “Law Firms in Germany,” she is the “premier contact on the market” for infrastructure. In October 2016, she received the JUVE Award for Regulated Industries with her team.

Prof. Dr. Georg Streit is a Partner at Heuking Kühn Lüer Wojtek and Head of the Restructuring practice group. In 2020, he legally advised, among other things, on the restructuring of Esprit group. Most recently, he was recommended by international handbook Chambers Europe 2021 in Restructuring/Insolvency and by Handelsblatt in the category of “Germany’s Best Lawyers 2021” in Restructuring and Insolvency Law.

Dr. Christopher Marx is a Partner and a member of the “Public Sector & Public Procurement” practice group. He advises the federal government, states, municipalities, and companies on complex competitive procedures and innovative contract models. He is regularly recommended in Public Procurement Law and the Transport sector, including by Legal 500, Handelsblatt, and JUVE.

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