Dr. Klaus Hubert Görg, provisional bankruptcy administrator for 15 further subsidiaries of Arcandor AG

18.06.2009

[] The District Court of Essen has appointed Klaus Hubert Görg from the legal firm Görg as the provisional bankruptcy administrator for 15 further subsidiaries of Arcandor AG.

Executives of the Arcandor Group submitted an application to open insolvency proceedings for these companies last Wednesday. This includes for principally companies which provide services or do other work for the already-insolvent core companies of the Arcandor Group. The business of the operating companies is to be maintained to its full extent.
"The decision by the court is understandable," said Klaus Hubert Görg at a press conference in Essen. "With one single provisional bankruptcy administrator for all the companies of the group, the chances for saving the group of companies as such are increased, since all communication and decision-making will be centralized."

Now more than ever

Together with his team, he will also immediately negotiate advance financing of the contribution to the insolvency fund of the workers' compensation board for these companies, so that all the employees of the now-bankrupt 15 companies can also receive their wages and salaries for June, July and August on time, added Görg. A total of 6,700 persons are employed by these companies
"When I talk to the employees, I can see a new motivation," said Görg. "Naturally, bankruptcy came as a shock at first, but the employees continue to be extremely committed and the cooperation with us as the provisional bankruptcy administrators is very good. Many are saying it's now or never. And this is of enormous importance, since commitment from the employees is the foundation for successfully stabilizing and continuing the firm."

Solution for trainees decided

One result of this commitment is that a solution for the trainees has already been decided on: in coordination with the provisional bankruptcy administrator, Karstadt Warenhaus GmbH is hiring, a total of 300 trainees, who will successfully complete their three-year training programs in coming weeks. 90% of these young people have completed their training as retail sales staff; other trainee occupations involve travel management assistants, catering managers and visual marketing designers.

For the 370 trainees whom Karstadt will be unable to offer immediate employment positions for legal reasons, Karstadt is conducting talks with a personnel recruitment agency, which would like to offer these young people an alternative.

Furthermore, it has also been agreed that the company will offer trainee positions to 1250 secondary school graduates as of September 1, 2009.

KARSTADT

The provisional bankruptcy administrator, together with his team, has familiarized himself with Karstadt's structures and processes, and facts and figures, insofar as this is possible for such a large company in a little more than a week. "We don't need any loans to secure Karstadt's liquidity," said Klaus Hubert Görg. "We believe we can handle the financing of Christmas business within the framework of existing contracts." He and his team have furthermore written to the more 24,000 suppliers and service-providers at extremely short notice and explained the procedures for payment release to them in an initial letter, so that only extremely minimal problems in the delivery of goods has occurred, added Görg.

Karstadt has posted sales revenues for June above the figures for the previous year, and exceeding the target. "We can say that customers are voting with their wallets and staying loyal to us," declared the provisional bankruptcy administrator.

QUELLE

"Yesterday, we informed the employees at Quelle and Primondo that we are working at full speed on the basic financing for Quelle," said Görg. In addition, he has held discussions in the last 48 hours in Berlin and Munich, in order to obtain collateral for Quelle's factoring service providers.
This collateral is needed so that business routine can be set up as quickly as possible under the conditions of bankruptcy law and business operations can be stabilized and continued. This also includes the printing of the autumn-winter catalog.
"After our efforts in the last eight days and my recent discussions, I can confirm today, that we have done everything that we could, to open up a feasible route for collateralization of Quelle service providers as regards outstanding purchases and sales," said the provisional bankruptcy administrator. "The customers are loyal to Quelle. We cannot determine a decline in orders, nor is there an increase in returns of already-purchased products. The customers have confidence in Quelle."

Arcandor

The provisional bankruptcy administrator and his team are currently concentrating on stabilizing business activities under bankruptcy conditions. "When we have the business, we will work out the key data for a reorganization concept together with the management board and the plenipotentiary and see in the process whether and to what extent we will need contributions from the shareholders for the restructuring of the Arcandor Group," said Klaus Hubert Görg.

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