PLUTA expert Dr Uwe Paul achieves 45% recovery rate for medium-sized vehicle service provider

Insolvency administrator Dr Uwe Paul from PLUTA Rechtsanwalts GmbH has achieved an above average dividend for the creditors of MG-Transfer GmbH. Thanks to the agreed insolvency plan solution, creditors will receive a recovery rate of 45% on their claims.

The insolvency plan provides for the Mönchengladbach-based vehicle service provider to continue operating in its existing legal form and for managing director Mr Heinz Ullmann to remain on board. Moreover, all 25 jobs have been saved. On 1 August 2022, the insolvency plan that was presented was approved by the creditors’ assembly and confirmed by the insolvency court. The proceedings were subsequently terminated by the Local Court of Mönchengladbach on 7 November 2022, as planned. The insolvency administrator was supported in the proceedings by attorney Mr Oliver Westkamp.

Business being kept operational since more than two years

MG-Transfer specialises in the transfer of new and used cars. In addition, the company offers a pick-up and delivery service for car dealerships, companies with fleets, leasing companies, workshops and private individuals. The company filed for insolvency in May 2020 due to liquidity problems. The local court opened the insolvency proceedings and appointed Dr Uwe Paul as administrator on 1 July 2020. He had previously acted as provisional administrator for the company and, together with managing director Mr Heinz Ullmann, has kept the business operational for more than two years.

MG-Transfer, based in North Rhine-Westphalia, has a good reputation in the industry. Even after the application for insolvency had been filed, all important customers remained loyal to the company, relying on the good cooperation with its founder, Mr Heinz Ullmann. “This was an important factor in being able to maintain operations successfully,” said Dr Paul. The talks held with business partners were positive. Another factor was the fact that MG-Transfer always did a very good job.

Extension of the IT system to increase efficiency

The restructuring expert was faced with several macroeconomic challenges, such as the coronavirus pandemic, the chip crisis and the rise in fuel prices. The automotive sector is suffering from supply chain problems, which result in deliveries of new cars being delayed. Road traffic authorities were temporarily closed or only accessible to a limited extent, which also had an impact on order processing.

Together with the managing director, the PLUTA attorney implemented several measures to optimise internal processes. “The transfer routes used to be planned manually. It was only a short time before filing for insolvency that the company was able to use a suitable IT system for this purpose. During the proceedings, we acquired additional tools for this system so that we now have a fully digital solution for this purpose, which also allows billing to be done completely electronically. This increases our efficiency significantly. We generated profits during the proceedings, despite the challenging conditions,” stated Dr Paul.

This successful continuation of business operations was the main reason for being able to achieve such a high dividend, which has already been paid out to the creditors. Insolvency recovery rates tend to be in the mid-single-digit range on average.

Dr Uwe Paul, an attorney for general law and a specialist attorney for tax law, mainly focuses on the continuation and restructuring of insolvent companies in the field of insolvency administration. He deals with both ordinary and debtor-in-possession insolvency proceedings and is regularly appointed insolvency administrator by the local courts of Düsseldorf, Mönchengladbach, Duisburg and Aachen.

Services for the automotive industry

MG-Transfer specialises in the transfer of motor vehicles. In addition, its staff provide advice on other services and compile customised service packages. Pick-up and delivery services for automobile repair shops, fleet replacement and obtaining temporary license plates are also part of the service portfolio of the company, whose origins date back to 1990.