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Suddenly bankruptcy: According to Vapiano, Esprit and Co.: This is what creditors expect in an insolvency procedure message


• Vapiano blames the pandemic

• Esprit escapes using protective shield procedures

• Believers now need staying power

Vapiano, Maredo, Esprit and Kaufhof-Karstadt have one thing in common: they were all in crisis long before the crisis. The corona pandemic and the protective measures and exit restrictions introduced on it were now only the last drop that caused the barrel to overflow. Because no solid group becomes insolvent immediately after the shops have closed for only a few days.

A catalyst for failure

“The primary cause of current insolvency was the corona crisis and the associated restaurant closures,” a company spokesman for Vapiano told SPIEGEL. In fact, the pandemic was only a catalyst for the company’s mismanagement. Of course, one should not forget that the group suddenly could no longer generate sales due to the closure of its restaurants, while the fixed costs continued to accrue. This exceptionally fast bankruptcy could certainly have been avoided by higher reserves or additional liquid funds.

A very similar situation has also occurred at the Esprit fashion group. In order to protect the group from further liquidity requirements as quickly as possible, Esprit boss Andreas Kristiansen immediately escaped into a so-called protective shield procedure. “I am very sure that this is the right step for Esprit,” said the company boss regarding this decision.

The stocks were diving long before the crisis

The fact that the operating business of Vapiano and Esprit had been running very moderately long before the Corona crisis is shown not least by the price development of the respective share. The shares in the restaurant chain plummeted between the IPO in June 2017 and before the start of the Corona crash on the German stock exchanges on February 14, 2020 from EUR 23 to EUR 3.61, generating a decline of around 84 percent. The Esprit share price looks very similar. While the shares in 2007 were still over 10 euros, on February 14, 2020, before the corona crash, it was only 16 cents and thus 94 percent less.

What can creditors now expect?

The basic idea of ​​insolvency proceedings is primarily the satisfaction of a debtor’s creditors. This is done by utilizing, selling or auctioning all of the debtor’s assets. In principle, all of the company’s assets are subject to bankruptcy. The assets are therefore only secured by an insolvency administrator, exploited and distributed only afterwards to the creditors. However, it usually takes several months or years before this happens.

First, the procedural costs and the bulk liabilities are serviced

How much money the individual creditors get back from the bankruptcy assets depends on a final distribution approved by the court, which is processed according to a specified distribution list. This legal distribution order stipulates that all procedural costs or the court costs incurred as well as the insolvency administration fees must be paid first. In the second tier of the claims, the debtor’s bulk liabilities are then serviced. Such liabilities include, for example, costs from rental and lease relationships, as well as claims from suppliers.

The allocation is based on a fixed quota

As soon as these mass liabilities have been serviced, the remaining divisional mass will serve the insolvency creditors who already had a claim against the company before the proceedings. If enough insolvency assets are still available, this is then distributed based on a specified quota based on the insolvency table. The owners of senior corporate bonds are preferred to the investors with subordinated loans.

Better believer than shareholder?

As a shareholder in a company, you are an automatic co-owner of a group and, strictly speaking, even a debtor and not a creditor. Fortunately, as a shareholder, you don’t have to vouch for a company’s debt. But while the shareholder of a bankrupt company suffers a total loss and has to write off his investment almost completely, the creditor can hope that he will still be awarded a certain part of the bankruptcy estate. However, since there is no fixed time frame for the duration of a company insolvency, in contrast to a private insolvency, the creditors often need to be extremely persistent. For large corporate insolvency proceedings, periods of five to ten years are the rule rather than the exception.

Pierre Bonnet / editors

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