Court Ruling Gives MIFA Creditors New Hope
SANGERHAUSEN, Germany – The latest ruling of the court of appeal in the Germany city of Naumberg is likely to improve the insolvency rate for MIFA AG creditors. The court concluded in its verdict that the administrative district of Mansfeld-Südharz has to return the former MIFA property in the center of Sangerhausen to the insolvent MIFA AG including the rental payments received.
MIFA’s insolvency administrator Lucas Flöther of Flöther & Wissing welcomes the judgment of the court of appeal in Naumberg. “The court’s decision is an important victory for the numerous creditors of MIFA AG. The court has followed our plea that the property belongs to the assets of the MIFA. Now we have to wait and see if the verdict will be final.”
Financial support for MIFA
The verdict and the possible approval of the revision of the German Federal Court of Justice is still pending. Once this is done, the district of Mansfeld-Südharz has four weeks to decide whether to appeal against the verdict.
‘In such a case, the sale of the property is subject to the so-called insolvency challenge’
In April 2014 the district of Mansfeld-Südharz had bought large parts of the company property from MIFA AG and subsequently leased this land back to MIFA AG. The district Mansfeld-Südharz wanted to support MIFA AG financially, because the company had financial difficulties.
No suitable restructuring plan
According to the insolvency administrator Lucas Flöther of Flöther & Wissing “The district Mansfeld-Südharz was already aware at the time of sale that MIFA AG was threatened with insolvency and that at that time no suitable restructuring plan had been available. In such a case, the sale of the property is subject to the so-called insolvency challenge: this means that a transfer of assets must be reversed if the debtor company was in fact already insolvent at the time of the transfer. This is to ensure that no creditor is better off than other creditors in line with the ‘creditor’s principle of equal treatment’. If the verdict becomes law, the we will try to sell the property in order to improve the insolvency rate for the creditors of MIFA AG.”
Lucas Flöther points out that this case has nothing to do with the new owner of MIFA, Sachsenring Bike Manufaktur GmbH. This company currently operates a bicycle factory at the former MIFA location.