Press Release

Advised by a team of Heuking Kühn Lüer Wojtek led by Dr. Marc Scheunemann, Dusseldorf, and Prof. Dr. Georg Streit, Munich, the international fashion group Esprit succeeded in taking an important step towards restructuring.

Heuking developed and implemented a comprehensive restructuring concept with Esprit group, which was assisted by Detlef Specovius (Schultze & Braun) as general representative (CRO) and KPMG AG Wirtschaftsprüfungsgesellschaft. The court-appointed custodian Dr. Biner Bähr (White & Case) supervised the process.

On October 29 and 30, 2020, the insolvency plans prepared by Heuking for six German subsidiaries that constitute the essential part of Esprit Group's operations were approved by a vast majority of creditors organized in six creditors' meetings.

Immediately after the creditors’ meetings, on October 30, 2020, the insolvency plans were confirmed by the Dusseldorf Local Court (Insolvency Court). As no valid or legally relevant objections were filed against the insolvency plans, the court resolutions are scheduled to become effective on November 14, 2020. It is expected that by the end of November 2020, a final resolution will be passed by the Insolvency Court to terminate the insolvency proceedings. After the final termination of the proceedings, Esprit will return to normal business operations. The process achieves a substantial debt reduction for the six German subsidiaries and allows for a complete restart of Esprit Group.

The approval of the insolvency plans by the creditors and the confirmation by the Insolvency Court are key steps in the restructuring process after Heuking had obtained protective shield proceedings for six German Esprit companies from the Dusseldorf Insolvency Court on March 27, 2020 as a reaction to the lockdowns and the extensive temporary store closures across Europe and Asia due to the COVID-19 pandemic and after the Dusseldorf Local Court had initiated the insolvency proceedings in self-administration on July 1, 2020.

The insolvency plans were funded by Esprit Holdings Limited, which is listed in Hong Kong and will continue to be sole shareholder of the six German subsidiaries. In this respect Esprit Holdings Limited was advised by Frank Tschentscher (Luther, Hamburg).

Anders Kristiansen, CEO of Esprit resumes: “The proactive entry into the protective shield proceedings allowed us to ensure that Esprit will remain operating as a brand and as a company. The team and I are very pleased with this great restructuring success, which we were able to achieve with the excellent support of our general representative Mr. Specovius, our advisors from Heuking, and the restructuring professionals from White & Case.”

Besides obtaining the confirmation of the insolvency plans, Esprit also obtained binding tax rulings submitted by Heuking to the competent tax administration, ensuring a tax exemptions for cancellation of debt income resulting from the implementation of the insolvency plans. The tax authorities examined in particular Esprit Group’s ability to emerge from restructuring as a going concern.

In the context of the implementation of the restructuring concept, Heuking supports in particular in commercial tenancy law and labor law issues in connection with the termination or renegotiation of commercial lease agreements and redundancy programs.

A major aspect of the legal advice was also the close operational and financial integration of the German subsidiaries within the Esprit Group with 86 group companies worldwide and numerous internal supply and service relationships. In addition to providing advice in Germany, the Heuking team, in close cooperation with foreign local partner law firms, manages the legal advice to numerous Esprit companies in more than 30 jurisdictions.

Counsel to Esprit Group
Heuking Kühn Lüer Wojtek:

Lead
Dr. Marc Scheunemann, LL.M. (Corporate / Tax), Dusseldorf/Frankfurt
Prof. Dr. Georg Streit (Restructuring, Insolvency), Munich

Restructuring
Dr. Arnold Büssemaker,
Dr. Fabian Bürk, LL.M.,
Dr. Kai Uwe Büchler,
Sarah Dorothea Kraft, LL.B. (all Restructuring), all Munich
Tobias Leege (Restructuring), Chemnitz

Corporate Finance
Dr. Guido Hoffmann, LL.M. (Corporate / Finance),
Dr. Christian Appelbaum (Corporate / Commercial),
Matthias M. Bosbach (Corporate / Finance), all Dusseldorf
Dr. Helge Wöhlert (Corporate),
Dr. Frank Metz (Corporate), both Munich
Dr. Christoph Gringel (Supervisory Law), Frankfurt

Tax
Dr. Stephan Degen (Tax / Restructuring),
Dr. Martin Ströhmann (Tax),
Peter Michael Schäffler (Tax),
Daniel Sommer (Tax), all Munich
Marion Sangen-Emden (Tax / Corporate), Dusseldorf

Real estate
Dr. Peter Zimmermann,
Dr. Stefan Osing,
Dr. Tilman Spancken,
Tanja Rodiek,
Kathrin Paulet,
Mathis Dick,
Felix Erler,
Stephan Freund,
Janina Theven (all Real Estate), all Dusseldorf

Labor law
Prof. Dr. Martin Reufels, LL.M., Cologne
Christoph Hexel, Dusseldorf
Ria Göbel, Chemnitz
Markus Schmülling, Cologne
Dr. Alexander Bork,
Torsten Groß, LL.M., both Dusseldorf
Dr. Antonia Michèle Stein,
Natalia Dinnebier, both Stuttgart
Dr. Johan-Michel Menke, Hamburg
Dr. Arietta von Stechow (all Labor Law), Hamburg

Public law
Michael Below
Anne Schulz (both Public Law), both Dusseldorf

Insurance law
Dr. Herbert Palmberger, Dusseldorf
René Krohn (both Insurance), Hamburg

IP
Dr. Georg Jacobs, Dusseldorf
Dr. Verena Hoene (both IP), Cologne

Antitrust
Dr. Rainer Velte (Antitrust), Dusseldorf