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Clashes Continue at MIFA as Endgame Nears

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SANGERHAUSEN, Germany – Yesterday the district court of Halle, Germany pushed aside the MIFA management and supervisory boards including MD Thomas Mayer and decided that the administrator is now THE decision maker for Mitteldeutsche Fahrradwerke AG (MIFA).

Clashes Continue at MIFA as Endgame Nears
Former MIFA AG Managing Director Thomas Mayer. – Photo MIFA

A MIFA press release dated 28 November brings to light the severe dispute between the MIFA management, supervisory board and the administrator. It says that the supervisory board has accepted Mayer’s resignation, “With great regret as the supervisory board is of the opinion that the administrator’s behaviour and actions made it unacceptable for Mr. Mayer to remain any longer.”

Successor

The supervisory board appointed Olaf Grothey to be the company’s sole management board member (CEO) with immediate effect, “Grothey has many years of board and managerial experience, including as former Industrial Relations Director and former management board member of Sartorius AG in Göttingen.”

MD Thomas Mayer started on October 1 at MIFA and planned to stay for three years. He started as co-managing director together with Dr. Stefan Weniger at that time MIFA’s MD and trouble-shooter. He left 8 October with Mayer becoming the sole MD of the insolvent German bicycle producer.

Management board contra administrator

Since the start of the insolvency proceedings MIFA’s board isn’t happy with administrator Dr. Lucas Flöther. This has to do with the fact that MIFA wants the insolvency proceedings to be handled ‘in self-administration’. This special German legal form allows the management of a company to handle its own insolvency and this can be compared with Chapter 11 of the United States Bankruptcy Code. It includes a suspension of payments. However, ‘insolvency in self-administration’ needs to be approved by the responsible Court.

Two district courts have decided not to grant the MIFA board its wish on self-administration insolvency. The courts now confirmed that administrator Lucas Flöther is THE decision maker in the furthered insolvency proceedings. MIFA’s further insolvency proceedings will be guided under the sole leadership of administrator Flöther. The entire management board, major shareholder Carsten Maschmeyer as well as supervisory board member Utz Claassen are pushed to the side-line.

Financial impact on local district

Moreover, MIFA’s financial troubles are now also impacting local authorities. This is due to rental payments that not have been made and which are the result of the sale-and-lease-back deal for € 5.7 million for MIFA’s grounds and facilities. MIFA agreed to pay a quarterly rental fee of some €160,000. The first term was paid in May. Since then no more payments were made by the bike maker. All this is now causing accusations of mismanagement of taxpayers’ money by higher authorities like the State Administration of Saxony-Anhalt on the local district. It is even said that sale-and-lease-back deal was illegal.

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