ERGOFIT GmbH, headquartered in Pirmasens, Germany, has filed an application for judicial reorganization proceedings in self-administration with the Pirmasens Local Court due to insolvency on May 25, 2023. The Pirmasens-based company, which celebrated its 75th anniversary last year, has a total of 105 employees.
Stabilization of business operations
With the application for court-ordered reorganization proceedings in self-administration, ERGOFIT is taking advantage of the opportunity for sustainable reorganization in order to establish its economic performance in a solid and robust manner in the future. The court granted the application on May 25, 2023 and ordered provisional self-administration for the company.
Prof. Dr. Holger Krakowski-Roosen, managing partner of ERGOFIT GmbH, remains in office and continues to be authorized to act and issue instructions. At the same time, the management will be supported by the experienced restructuring experts and lawyers Jens Lieser and Dr. Martin Kaltwasser from LIESER Management GmbH as general agents.
"Our primary goal is to continue the traditional company and to preserve the jobs."
Jens Lieser, LIESER Management GmbH
In the coming weeks, talks will be held with all key stakeholders to initiate and implement suitable restructuring measures for the sports equipment manufacturer.
"The most important message is: our customers can continue to order from us as usual without any restrictions. The operational business continues in full."
Dr. Martin Kaltwasser, LIESER Management GmbH
The insolvency court has appointed attorney Matthias Bayer from the law firm Abel und Kollegen Rechtsanwälte PartGmbB as provisional administrator. As an 'extended arm' of the court, he will constructively accompany the reorganization proceedings in the interest of the creditors, support the negotiations with customers and suppliers and supervise the management.
Continuation of business operations
The prospects for a sustainable turnaround are good, especially since ERGOFIT is financed through to the end of the year with its financial plan.
"I am confident that we will come through this phase in our company's history in good shape. The process is proceeding in a calm and orderly manner. The aim now is to get the company back on track in a stable, long-term manner so that we can remain competitive in the future with our good name and restore our economic performance. With our motivated employees and our high-quality training and equipment systems, which are highly valued by our customers, I am sure that we will succeed."
Prof. Dr. Holger Krakowski-Roosen, Managing Partner of ERGOFIT GmbH
Wages and salaries secured
The 105 employees were informed about the current situation and the next steps at a staff meeting on the day the application was submitted. Wages and salaries are covered by the
insolvency benefits from the German Federal Employment Agency until the end of July 2023. From August 2023, payments will again be made by the debtor.
Prof. Dr. Holger Krakowski-Roosen acquired the third-generation family business in 2022. A press release states that it has now emerged that the purchase was made for too high a purchase price. ERGOFIT, it adds, has a good and sustainable business model. But the average return was not sufficient to service the high interest and repayment burden for financing the purchase price, it said.
In the end, the application for self-administration became unavoidable due to the high burdens. In any case, the corona pandemic had previously affected sales, as many of the company's customers had less need for sports equipment during the officially ordered closures.
Positive outlook for sustainable turnaround
In the coming weeks, the management together with the general negotiators Jens Lieser and Dr. Martin Kaltwasser will draw up an insolvency plan or prepare a transferring reorganization in order to deleverage and reposition the company.
"Also taking into account the creditor interests, I see very good possibilities that a sustainable solution can be achieved."
Matthias Bayer, provisional administrator
Source and image source: BODYMEDIA
Published on: 22 June 2023