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Pfleiderer Group – A model restructuring

A&O advised on EUR1.1 million high-profile restructuring of Pfleiderer Group, one of the worldwide leading manufacturers of engineered wood, surface-finished products and laminate flooring.

Pfleiderer Group (2012/2015)

A&O advised the Steering Committee of the Finance Parties of the Pfleiderer Group comprising Commerzbank AG; Deutsche Bank AG; KfW Bankengruppe; Portigon AG (formerly WestLB AG) and UniCredit Bank AG (the Steering Committee) on the EUR1.1 million restructuring of Pfleiderer Group.

The restructuring of the Pfleiderer Group took place in two steps: an out-of-court restructuring with a proposed equity and (hybrid) bond restructuring, which was undertaken under the new German Bond Act for the first time and which finally failed due to an unexpected and first court decision relating to the new German Bond Act; and a subsequent in-court restructuring by way of a debtor-in-possession procedure (Eigenverwaltung) by the implementation of an insolvency plan which, inter alia, provides for an equity restructuring only subject to a majority vote of the creditors or shareholders under the recently amended German Insolvency Code (2012). The successful completion of the insolvency plan and all the divestments leave the Pfleiderer Group with a profitable core business in Germany and Eastern Europe. 3,600 jobs within the Pfleiderer Group (post divestment) have been preserved. The transaction won the award for Best Legal Advisory Project 2012 at PLATOW Recht Awards 2013.

In 2015, A&O advised Commerzbank International S.A. as the agent and the Luxembourg branch of Commerzbank Aktiengesellschaft as security agent of the lenders of Atlantik S.A. in connection with the cross-border reverse takeover within the Pfleiderer Group. With regard to the reorganisation of the group, Atlantik made use of an innovative structure: The German-based Pfleiderer GmbH was fully acquired by its listed subsidiary Pfleiderer Grajewo (reverse takeover). The acquisition was financed by the Polish company through a capital increase in the context of which Pfleiderer Grajewo issued new shares as part of a re-IPO. It also involved a private placement of existing shares. In the course of this group reorganisation, Atlantik also repaid loans taken over within the debt push up in connection with the acquisition of the Pfleiderer Group. Following the implementation of the reverse takeover, Atlantik holds  approx. 25 percent of shares in the new parent company Pfleiderer Grajewo S.A. At The Handelsblatt Restructuring Awards 2016 the transaction was recognized for “outstanding restructuring results”.

“One of the major restructurings in Germany”

Peter Hoegen (Partner, Frankfurt Restructuring) commented: “The restructuring of the Pfleiderer Group ranks – not least because it has tested the new Insolvency law (ESUG) for the first time – among the major restructurings in Germany. For various reasons, it can be seen as a blueprint for the German market and (from a cross-border perspective) as an alternative to the scheme of arrangements available in other jurisdictions.”

The A&O Team

The restructuring involved teams across the FrankfurtHamburgWarsawNew YorkLuxembourgParis and Amsterdam offices.

The Allen & Overy team was led by partners Peter Hoegen (2012, 2015) and Dr Franz Bernhard Herding (2015, both Banking & Restructuring/Frankfurt) and comprised partners Thomas Neubaum (Banking/Frankfurt), Dr Oliver Waldburg(Banking & Restructuring/Frankfurt), Dr Sven Prüfer (Corporate & Restructuring/Frankfurt), Dr Helge Schäfer (Corporate & Restructuring/Hamburg), Mark Manson-Bahr (Banking & Restructuring/Frankfurt, English Law), Arkadiusz Pędzich (Banking & Restructuring/Warsaw), Elizabeth Leckie (Banking/NewYork), Daniel Guyder (Restructuring/New York), Jean Schaffner (Tax/Luxembourg), Pierre SchleimerHenri Wagner (both Banking/Luxembourg), Marc Feider (Corporate/Luxembourg); counsel Jean-Christophe David (Banking/Paris), Jacques Graas (Corporate/Luxembourg); senior associates Bianca EngelmannDr Urs Lewens (both Banking/Frankfurt), Bartosz Merczyński (Banking/Warsaw), senior associates Fatih Coskun, (Banking & Restructuring/Frankfurt), Elke Funken-Hötzel (Banking/Frankfurt), Jan Boeing (Corporate), Marine Tarditi (Banking), Julie Carbiener (Tax/all Luxembourg) and associates Christopher Jahnke (Banking/Frankfurt, English Law), Dr Christopher Kranz (Banking & Restructuring/Frankfurt), Benedikt Dumbacher (Corporate), Paul Weber (Banking/both Luxembourg) Willem van der Vossen (Restructuring/Amsterdam) and Jaimie Hughey (Banking/New York).

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