Key point

The restructuring of the AVK Group shows what chances the “Law for Further Facilitating the Restructuring of Companies” provides regarding the restructuring of group entities in the group structure and incorporating them back into the group.

Background

Due to necessary restructuring of the business operations and a high cartel fine, the management of AVK Mittelmann Armaturen GmbH, a leading producer of gas and water distribution valves as well as the industry leader for hydrants in Germany, had to file for insolvency proceedings in self administration in February of this year.

Action

Taylor Wessing advised the Danish AVK Holding A/S during the institution of an orderly insolvency proceeding in self administration over the assets of its affiliate and the subsequent purchase of the business operations of AVK Mittelmann Armaturen GmbH out of insolvency. The company group acquired the business operations of its affiliate with economic effect to 1 April 2015, i.e. only 2 months after insolvency proceedings had been commenced. The business operations will be continued completely and by retaining the majority of the existing jobs.

With the purchase of its own affiliate out of insolvency, AVK Group has secured itself a strategically important sales bridgehead for the German market that is used by numerous domestic and foreign group companies for the sale of AVK-products.