Study trip to Nuremberg, Leipzig, Coburg, Markt Erlbach and Naila

The Institute for Cross-Border Restructuring at the University of Applied Sciences Kufstein Tirol is a cross-border platform that addresses the change processes of companies in transformation and turnaround. The eleventh study trip of the part-time Master's program in Corporate Transformation Management, led by Markus Exler, Professor (FH) and Head of the Institute, from May 15 to 17, 2023, took the group to companies that had recently initiated transformation or turnaround measures or were dealing with this topic. The tour group was hosted by Deloitte GmbH Wirtschaftsprüfungsgesellschaft in Nuremberg, PHI Technik für Fenster und Türen GmbH in Markt Erlbach, Forster Fenstertechnik GmbH in Naila, Kanzlei Linse & Ehrlicher Rechtsanwaltsgesellschaft mbH in Coburg and Landesbank Baden-Württemberg in Leipzig.

DELOITTE WIRTSCHAFTSPRÜFUNGS-GESELLSCHAFT, NUREMBERG

At the auditor, the topics were organizational structure and restructuring consulting. The students learned that there is no acquisition procedure for restructuring and transformation consulting services – the business comes mainly from direct requests from the corporate sector or from the network. Often, the necessary team members are recruited across locations and on a project-specific basis, but the individual locations are staffed by the respective managers with consultants. Before the offer is prepared, an internal conflict check is carried out. The students then worked on the topic of working capital management in the workshop. They developed the key influencing factors such as dunning, payment terms, purchasing behavior, inventory levels and conditions. Alteryx and Tableau software products were used to analyze and evaluate the data.

PHI TECHNOLOGY FOR WINDOWS AND DOORS GMBH, MARKT ERLBACH

Insolvency in self-administration and corporate succession were on the agenda at PHI. Since its foundation in 1990, the company has been offering solutions for technical accessories, corner welded connectors, post connectors and organic lawn edging, as well as steel pipe processing. In 2014, the company ran into financial difficulties when the EU imposed sanctions on Russia. The consequences were a drop in orders and the financial distress of a major customer. As a consequence, the company filed for insolvency under its own administration. The entire family went through a difficult time, as individual members also had to deal with the stigma of insolvency in their private lives. With a service rate of 20 percent to creditors and the acceptance of the insolvency plan, the proceedings were terminated in 2015. The appointment of the daughter, Lisa Kraft-Scheiderer, and the sales manager, Michael Müller, to the management initiated the succession of the company. The measures for the famous breath of fresh air included the installation of a photovoltaic system that resulted in a 30 percent increase in self-sufficiency, the introduction of a cockpit for monitoring productivity, and a paperless document storage system for a digital workflow. The productivity improvements were rewarded with a reduction in weekly working hours from 40 to 37.5 hours with no loss of pay.

FORSTER FENSTERTECHNIK GMBH, NAILA

The students worked on distressed M&A and post-merger integration at the Forster Group, which is active in window and facade construction, the manufacture of fire doors and sheet metal processing. The assets of the former Pazdera AG at the Naila site were transferred to Forster Fenstertechnik GmbH in the course of insolvency proceedings opened in 2022 as part of an asset deal. Parallel to the contract negotiations, the Forster couple, who own the company, dealt intensively with the possible integration of the employees. According to §613a BGB, the employment relationships pass to the acquirer in the event of a transfer of assets. Staff meetings were held to provide information and obtain consent. Due to a considerable investment backlog, extensive capital investments had to be made after the takeover in order to increase the productivity of the site. One measure was the acquisition of a fully automatic drilling and milling center, which uses 25 tools to process window frames fully automatically.

Kanzlei Linse & Ehrlicher Rechtsanwaltsgesellschaft mbH

In the subsequent appointment, the students learned about the perspective of the insolvency administrator, as well as asset deals and law firm organization. Preliminary insolvency proceedings were opened in December 2021 regarding the assets of Pazdera AG, Coburg and Naila. Mr. Klaus-Christof Ehrlicher, a lawyer from the law firm Linse-Ehrlicher Rechtsanwaltsgesellschaft mbH, Coburg, was appointed as the preliminary insolvency administrator. Forster Fenstertechnik GmbH acquired the Naila site by means of an asset deal. The people in charge presented the students with the rough course of the proceedings, the various activities of the shadow administration and the processing necessary for the proceedings, such as registration in the schedule of claims, insolvency accounting and dealing with the electronic file.

Landesbank Baden-Württemberg, Leipzig

The Landesbank Baden-Württemberg case study focused on restructuring management and financial creditors. The host began by explaining to the students that, in particular, owner-managed companies sometimes act against economic reason. Often, there is a lack of suitable instruments for monitoring warning signals, as well as a lack of sensitivity and insight into the causes of the crisis. When certain thresholds are exceeded, the front office hands over the credit management to the back office for intensive support or to the restructuring department. If the company's liquidity situation is very tight, it is quite common to grant a bridging loan until the report is completed. An important task in the restructuring process is to regain trust, to which the restructuring consultant also contributes in addition to an independent expert opinion. However, the first step is to prepare a liquidity status report to check whether the company is obliged to file for insolvency due to illiquidity in accordance with §17 of the German Insolvency Code. At the end of the restructuring period, which is usually set at two years, the company should be returned to the market development department. The prerequisites for this are full debt servicing capacity or the third-party bank test, i.e. the realistic replacement of the loan commitment by another credit institution.