The textile company BONITA, which specialises in high-quality women’s outerwear, has completed their company restructuring.
Creditors approved the insolvency plan with a large majority on 26 February 2021, with the court confirming it on 15 March 2021. The insolvency plan focused on the preservation and sustainable continuation of the company, satisfying the creditors and company alike. The investment team consists of four proven experts from the finance and fashion industry. Karsten Oberheide remains the sole managing director.
Despite the COVID-related restrictions and lockdown, BONITA terminated the self-administration process as was planned at the end of March 2021. “This is a great success”, said lawyer Dr Sven-Holger Undritz (White & Case), “because the retail sector is facing extreme challenges at this time and the uncertainty of how things will continue. It is all the more impressive that BONITA has emerged stronger from the crisis with the help of the restructuring process and can now leave it behind.”
“Without the firm will of all those involved, the successful conclusion of the procedure would not have been possible during this time. I would therefore like to thank the committee of creditors and the administration for their constructive support during the procedure”, said Karsten Oberheide.
An Interview With, Karsten M. Keilhack, LL.M. (Cardiff University), HTM Meyer Venn & Partner
What employment-based issues are there during insolvency?
In the self-administration insolvency proceedings of BONITA GmbH, we represented the two Works Councils for Sales and Head Office, as well as the General Works Council in the negotiations on the reconciliation of interests as well as the insolvency social plans for the restructuring-related staff reduction; we also voted on the insolvency plan on behalf of 1,272 employees at the creditors’ meeting on 26 February 2021. Reorganisation-related job cuts are subject to legal regulations in Germany. However, if the employer is already in insolvency proceedings, employees are in a very difficult position when negotiating reconciliations of interests and social plans. It is important here to convince the employer to create prospects for the dismissed employees in order to mitigate the social hardship associated with the dismissals as far as possible. For the head office workers affected by redundancies, for example, we succeeded in convincing the employer to install a transfer company to mitigate the social consequences for the workers affected by the job cuts. For the sales staff made redundant due to branch closures, the employer must look into transfer possibilities to continuing branches.
When voting on the behalf of employees, how do you ensure all voices are heard?
Voting on behalf of 1,272 employees at a creditor’s meeting is certainly not an everyday occurrence in German insolvency law. Employees mostly do not know their rights in insolvency proceedings. In the case of Bonita, we had the opportunity to work closely with the Works Councils to inform employees of their rights at the creditors’ meeting and offering them a concrete way to exercise their voting rights there.
Further to the above, why is this a rarity in insolvency proceedings? What rights do employees have?
Basically any employee who has a claim against his employer has a voting right in the creditor’s meeting. However, in practice barely a handful of employees attend such meetings in order to exercise their voting rights. In the case of Bonita, we were lucky that all members of the Works Council were very committed to their function and thus organised the collection of powers of attorney for the creditors meeting. And so it happened that we were able to vote on behalf of 1,272 employees at the decisive creditors’ meeting on 26 February 2021.