Kara will solve the bankruptcy by reorganization, the owners are to become Rinth and Natland

by   CIJ News iDesk III
2021-05-11   07:11
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The creditors of the fur trading company Kara Trutnov today approved a solution to the company's bankruptcy by reorganization at a hearing at the Hradec Králové Regional Court. The reorganization plan, which should maintain Kara's activities, will be compiled by the largest creditor, Natland Pohledávková V. from the Natland investment group. Kara should be taken over by her former owner Zdeněk Rinth, who should become Kara's new owner along with Natland. Kara has 160 creditors who demand CZK 277 million crowns.

"It is another important step to save Kara. I will manage Kara so that she gets out of the situation as soon as possible," said Rinth, adding that he should acquire a majority stake in Kara as part of the reorganization. He stated that Kare is ready to provide financing in the order of tens of millions of crowns. For example, he has already paid the wages owed to Kara's employees for February, and he intends to resolve the wages for March and April as soon as possible. At the end of January this year, Kara had 179 employees. By the end of April, their number had dropped to 157, of which 125 are in the Czech Republic and 32 in Slovakia.

As soon as possible, Rinth wants to open the hitherto closed Kara stores, which are mainly in shopping centers. "The first stores could open by the end of the week," Rinth said. Kara had 33 stores in the Czech Republic. By the end of April, the lease had ended with 24 of them, said insolvency administrator Lukáš Vlašaný. Kara has already completely cleared four stores in shopping centers and taken the goods to a warehouse in Trutnov, while her goods remained in the other stores. "There will be a few fewer stores, but we will have the entire Czech Republic covered, I have agreed to continue (with the landlords of the stores)," said Rinth.

He also looked back. "In 2018, I handed over Kara on a gold tray, when she had no liabilities, the seasons were secured and she had almost CZK 30 million on account. Today we are dealing with the same broken company, which has CZK 270 million debts and complex staffing," he said.

Natland said reorganization is more advantageous for unsecured creditors than bankruptcy. Natland and Rinth have a receivable of 167 million from Kara and have two-thirds of it secured by Kara's assets. Česká spořitelna originally had this receivable from Kara.

The claims of unsecured creditors should be satisfied from Kara's operating profit, the sale of Kara's unnecessary assets or a loan. The main part of Kara's property is stocks of goods in stores and warehouses, trademarks, receivables, store equipment, warehouse complex in Trutnov. The valuation of the property will only be carried out by a creditor approved today by the creditor.

Kara filed for insolvency in early February. She said that her finances were negatively affected by the government's restrictions and emergency measures in connection with the spread of coronavirus. The Kara company was bought from Rinth in 2018 by the C2H investment group of entrepreneur Michal Mička. Other Miček's companies are also in insolvency, such as the clothing company Pietro Filipi.

The insolvency administrator described Kara's current financial situation as critical. He stated that Kara's economic situation had deteriorated before the arrival of the covid epidemic, so that it gradually fell from a gross profit of 40 million crowns in 2017 to a loss of six million the year before. Last year, it had revenues of CZK 389 million.

Regarding the reorganization, Vlašaný stated that it should be more advantageous than bankruptcy, in which the company would be sold as a whole or in parts. He reminded that securing the operation of the company will not be possible without additional credit financing and qualified management. All present creditors today voted in favor of the reorganization.

Natland announced in February that he would join forces with Rinth to try to save Kara together. At the turn of March and April, Rinth also briefly became the Chairman of the Board of Directors of Kara. He was appointed and removed from office by Mička. Rinth subsequently stated that Kara, under Miček's leadership, was passive in insolvency and did not care about the operation of the company or the interests of creditors. Natland, from the position of chairman of the interim creditors' committee so far in the course of the insolvency proceedings so far, expressed suspicion that Mička may have been committing an infringement during Kara's proceedings. He referred, for example, to intra-group transactions for which Kara allegedly did not receive adequate consideration. Mička denied the allegations of illegality, calling the allegations unfounded. He justified Rinth's removal from office, among other things, by the ambiguities surrounding Rinth's reorganization of Kara at the time. The insolvency proceedings have been supervised by the regional public prosecutor's office since last week.

At the end of April, Mička himself filed for insolvency with a proposal for debt relief, in which he quantified his personal debts at at least 120 million crowns. At the beginning of April, Mička told Deník N that companies from the C2H consortium have debts worth CZK 800 million.

Source: CTK