Court Orders Bankruptcy For Heavy Machinery ServicesWilliam Malcolm
The High Court in Prague upheld the regional courts ruling rejecting the reorganization of Heavy Machinery Services (HMS) and has ordered bankruptcy liquidation for the company’s assets.
Legios Loco owes its creditors almost 3.3 billion crowns. According to the court, the company repeatedly disregarded interim measures that prohibited HMS from making larger payments without the consent of the insolvency administrator.
The High Court concluded that HMS does not seek reorganization to pay creditors but to ensure the maximum benefit of Legios Loco, to which it is economically dependent.
HMS refused to give the insolvency trustee access to its accounts. The company also refused to hand over the required documents to the experts or police.
HMS has refused to communicate with the trustee and the courts and has not clarified its relationship with Legios Loco.
The court found the company was not being completely forthright, and therefore rejected the reorganization permit.