03.05.2016

Luther advises MEP in its acquisition of the main German Pellets plant

On 1 May 2016, Metropolitan Equity Partners Management, LLC., acquired the main plant of the bankrupt Wismar firm German Pellets GmbH. The US financial investor chose law firm Luther to guide it through the process. Once again, Luther was able to provide its expertise in the field of restructuring/distressed M&A to successfully fulfil this mandate.

Background

On 1 May 2016, Metropolitan Equity Partners Management, LLC., acquired the main plant of the bankrupt Wismar firm German Pellets GmbH. The US financial investor chose law firm Luther to guide it through the process. Once again, Luther was able to provide its expertise in the field of restructuring/distressed M&A to successfully fulfil this mandate.

This means that production in Wismar will be taken over by Metropolitan Equity Partners Management, LLC., New York (MEP) and in the future will trade under the name of Wismar Pellets GmbH. MEP is an active financial investor with extensive experience in company development. MEP has appointed new management which, in cooperation with the experienced works team, will give the newly-founded Wismar Pellets GmbH long-term prospects.

Luther advised MEP ahead of the impending insolvency of German Pellets when the wood pellet manufacturer was no longer able to meet its obligations towards MEP. Its priorities were to safeguard the existing furnishings and real estate securities, and the strategic approach in the event of insolvency and questions of insolvency law. In this context, Luther also analysed alternatives to liquidation for the securities.

After the firm filed for insolvency, Luther advised MEP on DIP financing in order to keep production going at German Pellets, thereby maintaining the value of the securities as part of an ongoing business. This DIP financing was granted by Commerzbank AG, meaning that MEP provided security for a significant proportion of the risk with respect to Commerzbank AG.

Once MEP had decided to submit a bid for the German Pellets plant in Wismar, Luther advised it on the acquisition of the production plant and the transfer of employees. The major law firm provided support and advice throughout negotiations with the insolvency administrators at German Pellets and with other secured creditors and lender banks. Luther also developed the legal plans for the acquisition, financing and tax planning for the takeover.

The takeover by MEP of production at the Wismar plant has ensured its continued operation and the survival of the majority of jobs at the production plant. MEP is confident that in the future, Wismar Pellets will play a positive role in the wood industry in Wismar and the economic region of Mecklenburg-Vorpommern.

About MEP

Metropolitan Equity Partners Management LLC ("MEP") is an alternative investment manager that provides transition and expansion capital to growing private companies in the lower middle market.  MEP focuses on complex transactions in capital intensive businesses where it can add value via its network of experienced managers to catalyze a company’s transition to its next stage of development.

For MEP

Luther, M & A / Restructuring: Matthias Götz, Andrea Metz, LL.M. (both Lead Partner, Frankfurt am Main), Dr Johannes C. Becker (Cologne), Dr Felix Stamer (Dusseldorf), Dr Jan Saalfrank, LL.M., (Frankfurt am Main)

Luther, Banking and Capital Markets: Christoph Schauenburg, LL.M. (Partner, Frankfurt am Main), Dr Rolf Kobabe (Partner, Hamburg)

Luther, Insolvency: Dr Marcus Backes (Partner, Hamburg), Reinhard Willemsen (Partner, Munich / Cologne), Dr Hans-Peter Hufschlag (Dusseldorf)

Luther, Employment Law: Dr Thomas Thees (Partner), Achim Braner (Counsel, both Frankfurt am Main)

Luther, Tax Law: Nicole Fröhlich (Partner), Tilo Künstler (both Frankfurt am Main)

Luther, Real Estate Law: Zvi Tirosh (Partner), Mirjam Frick, LL.M. (both Frankfurt am Main), Detlev Stoecker (Partner, Berlin)

Luther, Antitrust Law: Anne Wegner (Partner, Dusseldorf)

Luther, Energy Law: Dr Holger Stappert (Partner), Dr Angelo Vallone (Counsel, both Dusseldorf)

Author
Dr Marcus Backes

Dr Marcus Backes
Partner
Hamburg
marcus.backes@luther-lawfirm.com
+49 40 18067 24699

Achim Braner

Achim Braner
Partner
Frankfurt a.M.
achim.braner@luther-lawfirm.com
+49 69 27229 23839

Nicole Fröhlich

Nicole Fröhlich
Partner
Frankfurt a.M.
nicole.froehlich@luther-lawfirm.com
+49 69 27229 24830

Dr Rolf Kobabe

Dr Rolf Kobabe
Partner
Hamburg
rolf.kobabe@luther-lawfirm.com
+49 40 18067 24680

Christoph Schauenburg, LL.M. (London)

Christoph Schauenburg, LL.M. (London)
Partner
Frankfurt a.M.
christoph.schauenburg@luther-lawfirm.com
+49 69 27229 24675

Dr Holger Stappert

Dr Holger Stappert
Partner
Dusseldorf
holger.stappert@luther-lawfirm.com
+49 211 5660 24843

Dr Angelo Vallone

Dr Angelo Vallone
Partner
Dusseldorf
angelo.vallone@luther-lawfirm.com
+49 211 5660 24834

Anne Caroline Wegner, LL.M. (European University Institute)

Anne Caroline Wegner, LL.M. (European University Institute)
Partner
Dusseldorf
anne.wegner@luther-lawfirm.com
+49 211 5660 18742

Reinhard Willemsen

Reinhard Willemsen
Partner
Munich, Cologne
reinhard.willemsen@luther-lawfirm.com
+49 89 23714 25792

Dr Hans-Peter Hufschlag

Dr Hans-Peter Hufschlag
Senior Associate
Hamburg
hans-peter.hufschlag@luther-lawfirm.com
+49 40 18067 12699

Detlev Stoecker