High recovery rate for creditors of Bayerisch Gmain Pflege- und Therapiezentrum GmbH

Creditors of the insolvent care and therapy centre in Bayerisch Gmain last week unanimously approved the insolvency plan presented by the company. The Local Court of Traunstein then confirmed this plan. The company has been involved in debtor-in-possession insolvency proceedings since late 2017. Mr Mirko Möllen from PLUTA Rechtsanwalts GmbH, as insolvency monitor, has been monitoring the proceedings and representing the interests of creditors.

The creditors’ positive vote is an important step in what has been a two-year process of restructuring the company within the framework of court-ordered debtor-in-possession proceedings. Insolvency monitor Mr Mirko Möllen said, “As things currently stand, creditors are set to receive a fixed cash dividend of approximately 30%. This is an initial positive step.” The insolvency plan also envisages the creditors participating in the anticipated sale of the company, which could result in a much higher recovery rate if successful.

A special feature of the insolvency plan is that this sale is only due to take place after the insolvency proceedings have been concluded. For this, the equity interests of Bayerisch Gmain Pflege- und Therapiezentrum GmbH will be transferred to a trustee who will be tasked with working with an M&A advisor to find an investor for the company. This will allow an overall solution to be found for all group companies, i.e. for the other institutions within the group as well, as part of a combined sales process.

The care and therapy business has been operating stably and without restrictions since debtor-in-possession proceedings began in December 2017. All some 300 residents are receiving professional care. Once various statutory periods expire, the Local Court is expected to terminate the proceedings in a few weeks’ time. The company restructuring has included the reorganisation of administration functions and service companies and the renegotiation of rental agreements for the institutions.

Bayerisch Gmain Pflege- und Therapiezentrum GmbH applied for debtor-in-possession insolvency proceedings with the competent Local Court of Traunstein in December 2017 with the aim of ensuring the company’s long-term survival in the interests of patients, employees, suppliers and creditors. The court opened proceedings on 1 March 2018 and ordered debtor-in-possession management. Experienced attorneys from LECON Restrukturierung Rechtsanwaltsgesellschaft mbH and TRICON - FREUNDL WOLLSTADT & PARTNER have been assisting in the restructuring.

Bayerisch Gmain Pflege- und Therapiezentrum GmbH operates care and therapy facilities at two locations: Bayerisch Gmain (main facility) and Hallthurm Untersberg. Some 220 employees provide care for residents across all facilities, with a combined total of approximately 300 beds.

The company is part of the MERKEL Group, which comprises 17 companies. In addition to Bayerisch Gmain, three other companies in the group are currently involved in insolvency proceedings. Fischbachau Pflege- und Therapiezentrum GmbH was sold to an investor shortly after proceedings were opened in March 2018.