William Malcolm

Heavy Machinery Services Enters Bankruptcy For 2nd Time

The creditors of Heavy Machinery Services (HMS) have decided that the company will end in bankruptcy for the second time. No one proposed a vote on the reorganization at the hearing at the Regional Court in České Budějovice. Creditors could thus receive money for receivables after years. The company is insolvent, it owes about CZK 1.1 billion. 

The resolution of the bankruptcy had to be voted on after the Supreme Court returned the case of the Louny car manufacturer to the beginning six months ago, when it overturned the original verdict on bankruptcy. Representatives of creditors with receivables for CZK 761 million were present at the meeting today.

A lawyer for the former wagon, formerly called Legios, said HMS insisted on a previously filed reorganization proposal. He admitted that the reorganization largely loses its meaning because the company no longer has a plant. Hýsková has previously stated that the court should declare bankruptcy again. According to her, reorganization is not possible, because the wagon no longer has any operations or employees. Last year, its premises were bought by Traťová strojní společnost for CZK 750.7 million. The administrator sold the plant in insolvency proceedings.

The company has been in bankruptcy since 2014. Creditors originally registered receivables for almost CZK 3 billion. At the moment, according to Hýsková, HMS owes 1.1 billion crowns. Of this, in incidental disputes, where the legitimacy of receivables is concerned, amounts of over CZK 200 million are resolved. The outcome of the disputes will affect the relative extent to which other creditors will be satisfied, Hýsková added. He has about CZK 800 million available on his accounts.

In April this year, the Regional Court in České Budějovice banned the company from disposing of its assets through preliminary measures. He complied with the insolvency administrator’s request. The right to dispose of the property transferred to it. According to the administrator, the company unjustifiably recognized receivables and could cause damage to creditors of up to CZK 0.8 billion.

The company was owned by businessman František Savov, who is accused of tax fraud and lives in London.