Mladá fronta publishing house

William Malcolm

Prague Court Blocks Mladá Fronta Sale

On Monday, the High Court in Prague annulled the declaration of bankruptcy of the Mladá fronta publishing house, and thus the subsequent sale at auction. The reason is the possible bias of Judge Zdeněk Strnad towards Mladá fronta or other participants in the proceedings. Both Mladá fronta and Týden magazine, owned by one of the creditors, Jaromír Soukup, have published critical articles about Strnad. Judge Strnad is excluded from the decision in the case of Mladá fronta, and another judge of the court of the first instance will decide on the resolution of the bankruptcy of the publishing house. The management of the publishing house did not want to comment on the current situation.

Through his company Jaromír Soukup Consulting, Soukup proposed in the spring that the court allow the reorganization of Mladá fronta.

However, he rejected the proposal and sent the company into bankruptcy. In the appeal, Soukup subsequently described the judge as biased. The reason was supposed to be critical articles about Strnad in the magazine Týden, which belongs to Soukup, and in the magazine Euro, published by Mladá fronta.

The mentioned articles were published last year, before the start of insolvency proceedings with Mladá fronta. Due to a report in Euro, Judge Strnad sent a pre-litigation summons to Mladá fronta last May, according to the reasoning of the Supreme Court’s verdict. In it, he demanded an apology, removal of the article, and payment of 100,000 crowns. According to the High Court in Prague, these circumstances suggest that at least Strnada’s relationship with Mladá fronta raises doubts about the judge’s impartiality.

According to the High Court, Judge Strnad stated that he had acted neutrally in the allegations of his alleged bias. According to the court, Strnad claimed that he no longer minded the articles in the Week and the Euro, because an apology published in another medium – the Forum24 server, which also wrote a critical essay about him, is sufficient satisfaction for him. However, according to the High Court, such an argument seems “very unreliable.” It is hard to imagine that the judge would proceed in a completely impartial manner in such a situation, the court added.

At the beginning of September, after Judge Strnad’s approval, an electronic auction of the publishing house was held with a starting price of CZK 36 million, in which two bidders applied. The winning company, PP Partners, bid CZK 50.1 million crowns. The creditors’ committee rejected this amount as low and called on potential new bidders to increase the price offered by at least a quarter to this day.

“As I said, the outcome of the auction was not decisive in itself, and the Supreme Court’s decision confirmed this. “reacted to the cancellation of the Čírtek auction.

The publishing house belongs not only to the Euro weekly and the portal, but also to Top specials, and the lifestyle magazines Esence and Hipster. The Online Division also operates the economic website and 12 other specialized online titles. The Books division launches around 250 new book titles for the general public and healthcare professionals annually. The publishing house’s portfolio is complemented by auto-moto and hobby magazines, medical magazines, Puntík magazine for the youngest children, Maminčin Puntík magazine, and Tečka magazine for children from the age of six.

The publishing house owner is the entrepreneur František Savov, who lives in London and is accused of tax fraud in the Czech Republic. According to the general director of the publishing house, Karel Novotný, the bankruptcy and subsequent bankruptcy of Mladá fronta, were the result of Savov’s decision not to finance the publishing house’s operation in the second and third quarters of last year.

According to data in the Commercial Register, Mladá fronta’s management has long been in the red. The company last reported a modest profit between 2004 and 2007. The company’s turnover fluctuated, ranging in the order of hundreds of millions. For example, in 2016, it was almost a billion. In 2018, Mladá fronta reported a loss of more than twenty million. According to Novotný, this year’s first-half loss was CZK 81 million.