Lawyer Bettina Schmudde from Kanzlei White & Case law firm was appointed as provisional solvency administrator in the insolvency proceedings initiated against the assets of German Pellets GmbH. The decision was taken by the competent insolvency court in Schwerin, according to a press release of the company.
According to the resolutions from the 10th of February, the court in Schwerin informed that the provisional solvency administrator has to safeguard the company’s assets, along with taking the tasks of ascertaining whether there are sufficient grounds to commence proceedings and assessing the prospects for the company’s continued existence.
During the provisional insolvency proceedings, the wages and salaries of the approximately 650 employees are guaranteed for three months, by means of insolvency substitute benefits. Also, the insolvency proceedings will probably begin at the beginning of May 2016 and the declaration of claims shall not be possible by this date.
According to German Pellets press release, creditors should refrain from declaring any claims before this date.
On the 10th of February, German Pellets filled for insolvency because of financial issues. One of the reasons for which the Wismar’s wood pellet producer got to this situation is the decline of oil costs, which brought the wood pellets price tag way below pressure. In addition, the incomes have lowered due to the weather conditions (the last two years’ warm winters) and the acquisition of Kago, the furnace producer, in 2010, which turned out to be a bad investment.
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