Distressed M&A Deal: Traditionsgießerei Walter Hundhausen aus der Insolvenz gerettet

Unterstützt durch ein seniores Team der Kanzleien act AC Tischendorf (Frankfurt), FINKENHOF (Frankfurt), WENDELSTEIN (Frankfurt) sowie held jaguttis (Köln) hat die Beinbauer Group zum 1. März 2021 das traditionsreiche Gießereiunternehmen Walter Hundhausen GmbH aus der Insolvenz erworben.

Walter Hundhausen, über deren Vermögen am 1. August 2020 ein Insolvenzverfahren eröffnet wurde, war bislang Teil der GMH-Group aus Georgsmarienhütte.

Durch die Transaktion wurden nun u.a. die Arbeitsplätze von insgesamt rund 380 Beschäftigten in Schwerte gesichert.

Die Beinbauer Group ist einer der führenden Zulieferer von Gussteilen für die Nutzfahrzeugindustrie in Europa. Das über die Jahre stark gewachsene Portfoliounternehmen des marktbekannten PE Investors H.I.G vereint drei Unternehmen der Zulieferindustrie unter einem Dach und beschäftigt über 1.000 Mitarbeiter an fünf Standorten in Deutschland und Tschechien.

Zum Hintergrund: act legal Deutschland ist als trusted advisor von H.I.G bereits langjährig auch für deren Portfoliounternehmen tätig – insbesondere, wenn über das rein juristische hinaus in Sondersituationen ein klarer und strategischer „Problemlöser“ gefragt ist.

Verkäufer: Dr. Dirk Andres (AndresPartner, Düsseldorf) in der Funktion des Insolvenzverwalters

The planned innovations in company law resulting from the ‚Act to mitigate the consequences of the COVID 19 pandemic‘.

The protective measures for the avoidance of the further spread of the COVID-19 pandemic do restrict the freedom to hold meetings; this also affects general / shareholder meetings of listed and private companies. This could have a significant negative effect as it will delay resolutions on important matters, such as approving annual accounts, capital measures, appointment of new boards.

The draft legislation for the law to mitigate the impact of the COVID 19 pandemic in civil-, insolvency and criminal procedural law provides for various simplifications for calling and holding such meetings and taking resolutions if such meetings are held still in 2020.

In case of stock corporations (AktiengesellschaftAG) and Societas Europaea (SE), for example,

  • the board of directors (Vorstand) can decide on the possibility to cast votes in the general meeting via electronic means even if this is not provided for in the articles of association;
  • the convening period can be reduced to below 21 days; and
  • the board of directors can decide to hold the general meeting within the business year (i.e. after the first 8 months)

The above changes are ’safeguarded‘ by a limitation of the possibilities of shareholders to challenge resolutions by the general meeting.

In  case of a company with limited liability (GmbH) there will the possibility to take resolutions in writing even if not all shareholders agree are extended (currently this is only possible if all shareholders agree to this). Also, the law will introduce some provisions regarding cooperative (Genossenschaft), associations (Vereine) and foundations (Stiftungen) which will make it easier to hold meetings and pass resolutions and to keep the board of directors in office even though ordinary period of their office might have been terminated automatically due to time limiations.

And last but not least, in case of a merger, the German transformation act requires to submit a balance sheet of the company which transfers its assets to another entity, and that the effective date of such balance sheet is not older than 8 months. This period will be extended to 12 months in order to account for the fact that due to the Coronacrisis, the taking of the shareholder resolutions required for the merger might take longer than 8 months.

Corona crisis – „Don’t panic!“ Correct customer communication in the financial sector

What exactly is the problem?

Crises that affect the capital markets have always led to short-circuit reactions among investors. Since stock exchanges have theoretically processed every piece of information the moment it ceases to be insider information, reactive action on the capital market is usually too late.

The usual advice in stock market crises such as those triggered by the current corona crisis is therefore always the same: „Don’t panic!“ Consequently, private wealth managers usually advise their clients to be patient and prudent in times of crisis. This advice is correct, but there are numerous legal stumbling blocks that you should avoid when communicating with your clients and choosing your course of action.

What do you need to do now?

Carefully review your clients‘ portfolios in light of the current situation on the capital market, taking into account various future scenarios. Pay particular attention to compliance with agreed investment limits, loss thresholds, investment guidelines and customer wishes. If you identify a need for action, do not act against your own advice: „Don’t panic!“, so this also applies to you.

Choose your communication with your clients carefully. Obtain instructions from your customers if necessary.

If there are several options for action, make your choice carefully and document it in detail.

What are the risks for you?

In investor protection processes, investors always bring up the same arguments again and again when investments prove to be loss-making in retrospect:

  • „I did not understand the product, but blindly trusted my advisor’s advice“
  • „If I had known that my investment strategy would have this effect, I would have chosen another“
  • „I only chose this investment strategy because my advisor told me that it had to be designed in this way for efficient advice“
  • „My counselor advised me to do this“
  • „Despite the crisis, my advisor has not carefully informed me of its possible consequences“

The result is not only lengthy and therefore costly investor protection proceedings, which are usually conducted through several courts and therefore over many years. In the worst case scenario, clients may also claim damages, as a result of which they would ultimately have to pay for the losses caused by the Corona crisis.

What other risks exist?

There are also considerable regulatory risks in the medium and long term.

Particularly after the subprime crisis in the years from 2007 onwards, the regulatory and supervisory authorities spent almost 10 years drawing conclusions for the financial industry, some of which are still being implemented today. Even „investor protection lawyers“ have jumped on this bandwagon and have covered the financial industry with lawsuits.

Not least because internal and external processes, documentation guidelines and the information and reporting systems of numerous private wealth managers were not adequate, a very consumer-friendly legal system has emerged, which has cost the financial industry billions. The regulatory authorities have derived numerous measures from this, which have been reflected in MiFID and MiFID II, for example.

The corona crisis has the potential to have an even more serious impact on the real economy and thus on investors than all crises in the past 50 years. If this potential has a corresponding regulatory impact, the financial industry will also face some regulatory challenges in the coming decade.

What can we do for you?

We have many years of experience in defending numerous investor protection lawsuits and the first test case in the financial services sector. In addition, we know what you need to pay attention to in your daily business due to our consulting practice. In addition, we communicate with the regulatory authorities on an equal footing and can also proactively influence them.

We make this accumulated know-how available to you in the well-known quality and speed, even in times of „Don’t panic!“

When communicating with your customers, customer advisors and external sales staff, we ensure that it is not only comprehensible but also legally sound.

When selecting the right courses of action and developing internal and external processes and documentation guidelines, we ensure that your records, procedures and decisions are legally sound.

Finally, we are happy to coordinate with the regulatory authorities in order to agree on packages of measures and to reduce or, in some cases, completely eliminate intervention by the authorities „ex officio“.

Please do not hesitate to contact us!