Liberec construction company BREX is bankrupt, owes creditors CZK 179 million

Liberec construction company BREX is bankrupt, its creditors have until the end of July to file their claims, according to information in the insolvency register. The court will not take into account applications filed later and claims filed in this way will not be satisfied in the insolvency proceedings, Judge Petra Netoličková warned in the resolution. The executive of BREX filed a petition for the opening of insolvency proceedings in May due to over-indebtedness and is seeking permission to reorganise.

BREX owes creditors nearly CZK 179 million, the company has been in trouble for a long time, at the end of April it limited work on the reconstruction of the Harcov dam in Liberec, where it is a subcontractor, a few days later the company withdrew workers and equipment from the reconstruction of the regional road in Rokytnice nad Jizerou in the Semily region. Due to the insolvency of the construction company, the Liberec Region has nine construction projects worth half a billion crowns at risk, for some of which it will have to find new contractors. "We are looking for ways to terminate the contracts," said Martin Půta (Mayors for the Liberec Region).

"The debtor states that at this moment it is in bankruptcy in the form of secondary insolvency and over-indebtedness, as its payable liabilities exceed the value of its assets," the executive said in the proposal. According to him, the company is unable to meet its obligations to its creditors and had just under CZK 380,000 in its accounts at the time of filing the petition. BREX, which employs 77 people, also has tangible assets of roughly CZK 73.595 million and receivables of nearly CZK 93.489 million, but even that is not enough to cover its liabilities, according to the managing director.

According to the managing director, BREX ran into a problem at the end of last year when it failed to reduce the volume of unfinished production and work on a number of orders was interrupted due to weather conditions. Currently, the company estimates that CZK 30-40 million worth of work remains in unfinished and unbilled production. The situation was aggravated at the end of April by Raiffeisenbank's demand that the company repay its overdraft and revolving credit, but BREX does not have the necessary more than CZK 37 million.

So far, 38 creditors have filed their claims for more than CZK 21 million in the insolvency proceedings. A review hearing will be held on 2 September at the regional court in Liberec, followed by a meeting of creditors. The creditors should decide whether they will agree to reorganise the company or send it into bankruptcy.

Source: CTK