Creditors did not decide on the fate of the developer ECM, the court will decide

CITY Project at Pankrácká plain

Prague - Creditors of the development company ECM Real Estate Investments (ECM) did not decide today on the future of the firm. Whether it will end up in bankruptcy or be given a chance for reorganization will thus be determined by the court. The creditors only agreed today that ECM will not have priority in presenting a reorganization plan proposed by its majority owner Milan Janků. ECM has been in bankruptcy since July, but the High Court in Prague cancelled the bankruptcy decision in October due to procedural errors.
When the fate of ECM will be clear is not yet known. "There is no deadline set for the court's decision," said insolvency judge Jiří Rada to ČTK.
The bankruptcy was enforced by creditors in July, including Česká spořitelna and Glancus Investments from the PPF group. For example, Glancus Investments and insolvency administrator Ivo Hala pushed for bankruptcy now as well. "The debtor is not reorganizable by law because it does not meet the turnover criteria," said Hala. However, the creditors' meeting as a whole did not join the bankruptcy resolution today.
In addition to the chairman of the board and CEO of ECM, Janků, the reorganization was also proposed by Astin Capital Management, which represents part of the bondholders. It registered the largest claim in the insolvency proceedings with approximately three billion crowns. However, insolvency administrator Hala did not recognize Astin Capital's claim.
A stir at today's court session was caused by information presented by ECM's legal representative that the developer is planning changes in its board, specifically the resignations of Jana Žejdlíková and Josef Homola. Conversely, three new faces are expected to join the company's leadership. According to the lawyer of Glancus Investments, however, this change may be in violation of insolvency law. The PPF group company thus wants to ask the court to prohibit such changes with a preliminary measure.
Creditors registered claims in the insolvency proceedings against ECM totaling 9.5 billion crowns. However, insolvency administrator Hala only recognized claims of 2.2 billion crowns. Many of the claims, according to him, were submitted by companies that form a conglomerate with ECM.
Recently, ECM was also sent into bankruptcy by a court in Hong Kong. ECM holds a stake in the ECMall shopping center in Beijing through a company based in Hong Kong. According to a legal analysis referred to by the management of ECM, the decision on liquidation in Hong Kong is not an obstacle to reorganization of the company in the Czech Republic.
The real estate group CPI of billionaire Radovan Vítek has also entered the game for ECM's assets and projects. It proposed to buy them as a whole for 35 million euros, which is about 892 million crowns. Earlier, Austrian company S+B Gruppe and Skanska also expressed interest in some of ECM's properties and projects in Prague at Pankrác.
ECM is mainly known for its high-rise building projects in Prague at Pankrác. The company was founded in 1991 by entrepreneur Janků.