The Commercial Court in Rijeka has approved the bankruptcy administrator of the shipyard 3. Maj d.d. in bankruptcy Loris Rak to file a lawsuit against the state, aimed at contesting the Agreement on the Transfer of Business Shares and the Agreement on the Settlement of Part of the Claims, by which the state became the owner of the subsidiary. The bankruptcy administrator of 3. Maj, Loris Rak, stated that the possibility of a settlement will be considered, and if it does not occur, he plans to file a lawsuit.
These are agreements that were concluded at the beginning of the year between 3. Maj and the Republic of Croatia, which regulate the settlement of part of the claims of the Republic of Croatia by transferring all, or three business shares that 3. Maj had in the subsidiary 3. Maj Rijeka 1905, or 100% of the subsidiary’s share capital of €10.3 million, to the state.
Monetization of Assets
The bankruptcy proceedings against the ‘old’ shipyard 3. Maj were opened at the Commercial Court in Rijeka in May. In September, the first examination and reporting hearing was held, and the creditors accepted the report of the bankruptcy administrator, in which he assessed that the assets would not be sufficient to cover the claims and agreed to the monetization of assets and the decision that the operations of 3. Maj would not continue.
During the examination hearing, the attorney for the company Adria Rijeka Alen Ivković contested four claims, including the claim of the Ministry of Finance based on protested guarantees, and was referred to litigation by the court.
After the reporting hearing, Ivković, regarding the bankruptcy administrator’s assertion that the bankruptcy estate is not sufficient to satisfy the creditors, inquired whether certain assets had been transferred to other companies, or to the subsidiary 3. Maj Rijeka 1905 before the opening of bankruptcy, and whether there is a possibility of returning those assets.
Transferred Assets
The bankruptcy administrator confirmed at that time that the bankruptcy debtor, in the process of increasing the share capital, transferred certain assets, namely the production facility and certain real estate to 3. Maj Rijeka 1905, and that this property was later transferred to the Republic of Croatia for the purpose of offsetting claims, and that a legal analysis is underway to determine whether there are grounds for potentially contesting these actions.
The government made the decision on the settlement of part of the claims of the Republic of Croatia against the shipyard 3. Maj, by transferring the business shares of its subsidiary 3. Maj Rijeka 1905 to the state and the transfer of the concession to that company last December.
The company 3. Maj Rijeka 1905 continued its shipbuilding activities at the same location and contracted new jobs, including the construction of the hull of a new generation polar cruise ship for Scenic Group, while previously contracted jobs were completed by 3. Maj.
The Center for Restructuring and Sale (CERP) announced in September a Public Call for the collection of binding offers for the purchase of three business shares of the company 3. Maj Rijeka 1905 d.o.o. owned by the Republic of Croatia, at a starting price of €6.6 million and with the condition of retaining the shipbuilding activity.
The total nominal value of the three business shares, representing a 100% share in the share capital, amounts to approximately €10.3 million, the starting price for the sale of the business shares is slightly above €6.6 million, and the deadline for submitting offers is November 17.
