AWG rescued via insolvency plan proceedings

The clothing and textile retailer, a historic brand with 300 branches in southern and eastern Germany, successfully emerged from insolvency proceedings under debtor-in-possession management on 1 July 2019. Under the leadership of company partner Sebastian Wilde, FalkenSteg Restructuring Advisory assisted with self-administration and chief restructuring officer duties during the process.

AWG Allgemeine Warenvertriebs-GmbH filed for insolvency under debtor-in-possession management with the local court in Esslingen in late January 2019 on account of its impending inability to make payments when due. In addition to a relatively quiet autumn in 2018, the fashion retail chain’s high purchasing volumes and the resulting high levels of stock on hand limited its liquidity.

On 1 July 2019, AWG emerged from the court-supervised recovery process, having successfully undergone an extensive series of operational restructuring measures. An interdisciplinary team of business recovery experts was on hand to assist AWG throughout the process, led by Martin Mucha from law firm GRUB BRUGGER. Mucha served as executive manager, while Dr Holger Leichtle of Schultze & Braun assumed the role of debtor-in-possession administrator.

The project was also supported by Alexander Morgenstern from the Switzerland-based ANTHOS Group, who acted as chief restructuring officer (CRO), as well as Struktur Management Partner, Ebner Stolz and FalkenSteg. While Ebner Stolz primarily advised on the accounting and tax implications of the insolvency proceedings, Struktur Management Partner worked together with FalkenSteg on the reporting, liquidity planning and operational restructuring. For instance, FalkenSteg took action to overhaul the company’s purchasing operations, which were under the leadership of Morgenstern, along with related processes at the firm. This ensured that it would be well placed to meet the needs of today’s market, which is increasingly driven by seasonal factors. In addition, FalkenSteg advised law firm GRUB BRUGGER on business administration matters.