DGAP-News: One Square Advisory Services S.á.r.l. / Key word(s): Bond/Insolvency
08.11.2021 / 12:06
The issuer is solely responsible for the content of this announcement.
Munich, 8 November 2021
One Square and Heuking Kühn Lüer Wojtek would like to thank all bondholders of Eyemaxx Real Estate AG for participating in the investor conference call on November 4. The recording of the investor conference call can be accessed at https://onesquareadvisors.com/eyemaxx/.
Due to the developments that have occurred since then - in particular due to the insolvency filing of the company in Austria that has now been filed - the urgency to join the third-party insolvency filing in Germany as well as the convening requests for the election of a joint representative has further increased.
To do so, bondholders can continue to register by email at email@example.com.
The main points are summarised below:
Cause - (Suspected) insolvency of Eyemaxx Real Estate AG.
In its ad hoc announcement of 25 October 2021, Eyemaxx Real Estate AG announced that it does not have the necessary financial resources to pay the semi-annual interest in the amount of € 1.5 million due on 26 October for the corporate bond 2018/2023 (WKN: A2GSSP / ISIN: DE000A2GSSP3) on time. The reason for this is that payment flows from project sales in the mid-single-digit millions have not yet been received and their refinancing has failed. The company itself has thus announced its insolvency, or at least the presumption of insolvency must be assumed.
Due to this dramatic development, bondholders from all three bonds issued by Eyemaxx Real Estate AG had approached One Square with the request to organise the representation of the bondholders of Eyemaxx Real Estate AG. In consultation with significant bondholders, One Square and Heuking Kühn Lüer Wojtek had sought contact with Eyemaxx Real Estate AG in order to find an out-of-court solution. Unfortunately, these efforts were unsuccessful, Eyemaxx Real Estate AG was not available for a constructive dialogue.
Insolvency filing of Eyemaxx Real Estate AG
As suspected in advance and as has since been confirmed, Eyemaxx Real Estate AG was planning to file for insolvency in Austria. In addition, Eyemaxx Real Estate AG has appointed Mr Dirk Eichelbaum, attorney-at-law, as its general representative in Germany. Mr Eichelbaum is an experienced specialist lawyer for insolvency law with numerous references, who formerly worked for the Düsseldorf law firm Buchalik Brömmekamp and is now self-employed. Information on Mr Eichelbaum can be found on his website (https://dirk-eichelbaum.de/) and in the press, e.g. at (https://www.welt.de/wirtschaft/bilanz/article169009828/Unsittliches-Angebot-fuer-Trigema-Chef-Grupp.html?cid=socialmedia.email.sharebutton).
As announced in the Austrian insolvency news of 5 November, Eyemaxx Real Estate AG has filed an application for restructuring proceedings without self-administration at the Korneuburg Regional Court in Austria. The proceedings have now been officially opened by the Korneuburg Regional Court:
By means of these tightly set dates and deadlines, facts are to be created in a timely manner. The tight schedule indicates that the company has been preparing the proceedings for a long time and that a restructuring plan has been worked out to compensate the creditors with a quota of 20%.
Therefore, it is imperative for the bondholders to organise themselves and establish strong representation in the insolvency proceedings. One Square and Heuking Kühn Lüer Wojtek have agreed to organise and take over the representation of the bondholders in the insolvency proceedings.
Restructuring proceedings in Austria compared to insolvency proceedings in Germany
By filing the application, one recognises the efforts of Eyemaxx Real Estate AG to conduct the proceedings in Austria. The reason for this can only be that there are significant advantages for the company, much to the detriment of the bondholders.
The so-called restructuring procedure in Austria is an insolvency procedure and has certain parallels to a German protective shield procedure.
This means that Eyemaxx Real Estate AG will present the creditors with a restructuring plan with the following key points:
In contrast to Austria, no minimum quota is set in Germany, but the quota is determined by the actual realisation of the existing assets, the value of which was at least €195.8 million in the last audited individual annual financial statement, an indication for a significantly higher quota than 20%. In combination with the short period of time as well as the unfamiliar procedure for the mostly German bondholders, there is a risk that the shareholders of Eyemaxx Real Estate AG will benefit disproportionately from the proceedings in Austria due to this quota.
In addition, the management board of an AG loses its capacity to act in German insolvency proceedings.
Furthermore, experience with Austrian insolvency proceedings shows that the rights of German bondholders are easier to assert and much more enforceable in German insolvency proceedings.
Austrian insolvency law does not provide for a joint representative for bondholders of a German bond. Each bondholder must file his claim himself and participate in the proceedings and the votes himself or be represented.
Voting on the restructuring plan does not take place in creditor groups, but by the entirety of creditors, both according to the amount of the established claims and according to the number of registered creditors. Therefore, it is of utmost importance that many bondholders register or be represented in order to preserve and represent the rights of the bondholders with a majority.
Measures taken so far - third-party insolvency filing and convening requests
Third-party insolvency filing
One Square and Heuking Kühn Lüer Wojtek have already taken a number of countermeasures in order to protect and represent the rights of the bondholders in the best possible way.
One Square has already filed a third-party insolvency petition, alternatively a petition for the opening of secondary insolvency proceedings, against Eyemaxx Real Estate AG with the Local Court in Aschaffenburg on 2 November 2021. If the court in Aschaffenburg opens such secondary insolvency proceedings, the assets of Eyemaxx Real Estate AG located in Germany would also be realised in Germany and would therefore not fall under the reorganisation plan submitted in Austria.
This would ensure a fair realisation in line with the market by a German insolvency administrator, at least for the "German assets".
In addition, in insolvency proceedings in Germany, the appointment of a joint representative is mandatory. In insolvency proceedings in Austria, this protective provision does not apply. Therefore, it is important to pursue the third-party application in Germany for the opening of secondary proceedings in Germany.
The court in Aschaffenburg has served the third-party insolvency filing on the company for comments and will decide on the opening of preliminary secondary insolvency proceedings after receiving the comments. In any case, the motion filed will gain significant weight if as many bondholders as possible join in.
After consultation with several major bondholders, One Square, supported by Heuking Kühn Lüer Wojtek, has issued a convening request to Eyemaxx Real Estate AG for a bondholders' meeting to elect a joint representative for each of the bonds issued by Eyemaxx Real Estate AG in order to ensure the best possible representation of the interests of the bondholders.
The provision in Section 19 (3) German Bond Act, according to which the joint representative is entitled to assert the rights of the creditors in the insolvency proceedings, only refers to insolvency proceedings in Germany.
For the Austrian insolvency proceedings, this initially means that the joint representative cannot represent the bondholders as a whole and, for example, file claims, but must be legitimised by the individual power of attorney of each bondholder. This entails considerable disadvantages for the bondholders:
However, we will put a resolution proposal to the vote at the bondholders' meetings we have convened, which will also grant corresponding rights in Austria. We see a high chance that the legitimacy of the joint representative will also be recognised in Austria, as this concerns the internal relationship of the arrangement of the bond rights and is governed by German law.
Legal background / Next steps
Bondholders' meeting to elect a joint representative
The convening of a bondholders' meeting is not rendered obsolete by the opening of insolvency proceedings. A quorum of 5% of the outstanding nominal value of a bond can demand that Eyemaxx Real Estate AG convenes an initial bondholders' meeting to appoint the joint representative. Should Eyemaxx Real Estate AG refuse to convene a bondholders' meeting, 5% of the bondholders of a bond have the right to file a request for the convening of such proceedings with the competent local court.
If no joint representative has been appointed by the time the insolvency proceedings are opened, the competent insolvency court will call a bondholders' meeting ex officio in the case of proceedings in Germany. If (only) the proceedings now opened in Austria remain, this does not apply. If a joint representative is appointed, he represents the bondholders in the insolvency proceedings and collects and coordinates the information.
It is urgent that bondholders exercise their rights. The broader the base, the stronger the bondholders' position. Therefore, please join the third-party insolvency filing as well as the convening request.
One Square and Heuking Kühn Lüer Wojtek are available to represent the bondholders both as joint representatives and on the basis of individual powers of attorney. The individual bondholders will not incur any additional costs for the representation by One Square and Heuking Kühn Lüer Wojtek. Any remuneration will be paid within the scope of the insolvency proceedings.
For further information, please contact One Square at firstname.lastname@example.org.
One Square Advisors
fax: +49-89-15 98 98-22
About One Square
One Square Advisors GmbH is an independent advisory firm based in Munich with offices in Frankfurt, Düsseldorf and London and is one of the leading corporate finance firms in Germany. All partners and team members have many years of transaction and restructuring experience. They have worked in leading consulting firms, investment banks as well as in managing positions of companies. One Square has successfully completed over 100 transactions since 2009 and has an excellent track record in representing bondholders in restructurings and insolvency proceedings.
About Heuking Kühn Lüer Wojtek
With more than 400 lawyers, tax advisors and notaries at eight offices in Germany and an office in Zurich, Heuking Kühn Lüer Wojtek is one of the large German business advisory firms. Founded 50 years ago, Heuking Kühn Lüer Wojtek is one of the TOP 10 law firms in Germany in terms of revenue, according to the industry publication JUVE, where it is recommended as one of the leading law firms in the areas of bonds, restructuring, M&A and other areas. The scope of our legal advice ranges from medium-sized companies based in Germany and abroad to large international (also listed) companies in all commercial law matters.
08.11.2021 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
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