bnt attorneys in CEE are supporting leading Lithuanian marine industry ship outfitter on the insolvency of Germany’s MV Werften group.
bnt partner and cross-border insolvency specialist Frank Heemann has been advising Lithuanian Aros Marine on insolvency and related questions after Germany’s MV Werften group of shipyards fell into insolvency.
MV Werften is a Hong-Kong-German shipbuilder which operated three shipyards in the eastern part of Germany to construct cruise ships for the parent company Genting Hong Kong. MV Werften filed for insolvency in January 2022 and an administrator was appointed, first in provisional insolvency proceedings (German: vorläufige Insolvenzverwaltung), and as of 1 March 2022 in regular insolvency proceedings.
Aros Marine from Klaipeda/Lithuania is a leading company in the marine industry, specializing in new build and refurbishment ship projects, in particular turnkey solutions for interior design and HVAC installations, detailed engineering, and design solutions as well as furniture production.
Aros Marine sought advice on German insolvency law to assess their position and minimize their risk exposure under certain contracts concluded with MV Werften for provision of works and materials for the construction of the mega cruiser Global Dream I (with approx. EUR 1 billion construction costs) in the Wismar/Germany shipyard.
Since the initiation of provisional insolvency proceedings (German: vorläufige Insolvenzverwaltung) of MV Werften, bnt attorneys in CEE partner and insolvency specialist Frank Heemann has been advising Aros Marine on questions of German insolvency law, including legal, tactical and pragmatic advice concerning the specifics of German provisional insolvency proceedings; rights of the insolvency administrator under German insolvency law to decide on the fate of executory contracts such as our client’s agreements with MV Werften on provision of works and materials; rights to claim damages for breach of contract and compensation for storage of an insolvent company’s goods; treatment of advance payment guarantees in insolvency; filing of insolvency claims.
The landmark MV Werften insolvency illustrates that proper legal advice is strongly recommended in order to understand the specifics of a foreign insolvency system which might vary significantly from those in the home jurisdiction. For instance, German insolvency law has provisional insolvency proceedings (German: vorläufige Insolvenzverwaltung) and a related provisional insolvency administrator (German: vorläufiger Insolvenzverwalter). Neither is known in Lithuanian insolvency law. Another example of significant differences is the treatment of executory contracts when comparing the very detailed German insolvency regime and the more rudimentary regulation under Lithuanian insolvency law applicable to so-called executory contracts.
Executory contracts are contracts between the insolvent company and a business partner, where the contractual obligations have not been fully performed by the parties at the moment of opening of insolvency proceedings.
Proper legal and pragmatic advice on applicable foreign insolvency regulation, ideally in the client’s mother tongue, ensures that a well-informed management can take the necessary decisions, thus minimizing risk exposure and benefiting from opportunities, including negotiations with the insolvency administrator.
The international team of bnt attorneys in CEE insolvency and restructuring experts is led by partners Frank Heemann and Stela Ivanova. The team provides a one-stop shop multijurisdictional insolvency and restructuring related advice forum in Central and Eastern Europe.