ae group, an automotive supplier, with approx. 1400 employees filed for bankruptcy on April 2nd, 2009.
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The company has plant locations in Gerstungen (Thüringen, Germany), Nentershausen (Hessen), Selmsdorf (Mecklenburg-Vorpommern, Germany), Schortens (Niedersachsen, Germany), Lübeck (Schleswig-Holstein, Germany), Strzelce Krajeńskie (Poland) as well as LaGrange (Georgia, USA). ae group produces aluminum die cast parts for well known automotive companies. Customers for example are ZF, Wabco, VW/Audi, Continental, GM/Opel, Daimler, etc. Parts made by ae group are used in the Porsche Cayenne, Audi Q7, Audi A3, A4, etc.
Due to the economic crisis the companies sales forecast plummeted by 50%, from est. 180 Million € to est. 100 Million €. Earlier this year, Andrew Seidl, an attorney-at-law and tax lawyer specializing in bankruptcy, was named CEO to head up the restructuring of the company. Reduced work hours and partial plant closures would not have been enough to overcome the crisis and leave enough operating capital, even after the underwriting banks would have waived liability. Therefore, the original restructuring concept with creditors foregoing approx. 47 Million € could not be realized.
For that reason the management board decided to redefine the reorganization concept and align it with the new market conditions. Management is using the bankruptcy proceedings as a “Fast Speed Restructuring”. The plan is to use a special form of self administration during this course of action. This means that there is no liquidator leading the bankruptcy. Instead the management board, under the supervision of a bankruptcy court administrator, conducts the restructuring on its own. The plan allows 5 months for the reorganization to take place and the bankruptcy proceedings will be completed by mid to end of August 2009.
Especially the industries hit hard by the economic crisis can benefit from bankruptcy proceedings by freeing up ballast from the past and redirect their future. Through these proceedings current risks can be cut. Special contract cancellation clauses also allow for unfavorable contracts to be terminated. This legal framework provided by bankruptcy law is making it possible for ae to shrink to a healthy size, so that they can emerge in the fall 2009 as a strong competitor. During this short bankruptcy phase the company will be fully maintained. Customers will continue to receive their product on time and to the existing quality requirements. Besides the expected plant closures, a reduction of the workforce is also anticipated.
Foundries Profile: ae group ag