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Business news in Slovenia

Preparatory hearing held in Adria damages lawsuit against German managers

Kranj, 02 April (STA) - A settlement and preparatory hearing was held on Tuesday in the EUR 78 million damage claim brought by the receiver of bankrupt airline Adria Airways against the German managers of the former Slovenian flag carrier. The Kranj District Court has scheduled the first hearing for 12 July.

No settlement was reached at the preparatory hearing, which was not attended by official receiver Janez Pustatičnik nor by Arne Schuster and Holger Kowarsch, who led the company - sold by the state to the German fund K4 Invest in 2016 - prior to its bankruptcy in 2019.

"The plaintiff considers that, in the run-up to receivership, the management ignored its duties to instead execute certain activities considered by the receiver as prohibited and as having caused damage to creditors," Blaž Štrumpfl, the lawyer representing the claimant, told the press.

A forensic audit is said to have shown that the former management of Adria had violated insolvency legislation by failing to take action despite knowing that the carrier was insolvent.

If a company becomes insolvent, the management is required by law to submit to the supervisory board, within one month of the insolvency, a report on financial restructuring measures, including an opinion about a potential 50% chance of restoring solvency via financial restructuring. If such a chance exists, a proposal for restructuring, for instance via recapitalisation, is also required.

The law stipulates that, unless the management proves otherwise, the creditor is deemed to have suffered a damage as a result of the acts or omissions of the management equal to the difference between the total amount of its claim and the amount covered in receivership proceedings. Hence the EUR 78 million claim.

When the Slovenian flag carrier went bankrupt in October 2019, it was left with tens of millions of euros in outstanding debt. The receiver recognised claims worth 88 million, while the liquidated assets amount to around EUR 10 million.

So far, EUR 5.5 million has been paid to creditors from the bankruptcy estate, EUR 1.4 million is still in the account and the remaining EUR 3 million has been used for the costs of the insolvency proceedings, according to the regular report by the receiver from January this year.

The sued party rejects the receiver's allegations and denies any prohibited or abandoned actions. It was represented in court today by lawyer Borut Leskovec, who declined to make any statements to the media.

The court called on both parties to submit further evidence within 30 days and called the first hearing for 12 July. It is not clear yet how many hearings will be necessary, but the two sued managers are scheduled to be heard during the trial.

Receiver Pustatičnik originally also filed a lawsuit against Estonian Sven Kukemelko, who became Adria's CEO just four months before the launch of receivership. The lawsuit was later withdrawn in the face of the relatively high translation costs and of what Pustatičnik considers a relatively minor, if any, role that Kukemelko played in the damage caused.

Meanwhile, the actions of the former Adria management and representatives of 4K Invest are also being dealt with separately by law enforcement authorities, which are investigating possible abuse of office and business fraud. According to unofficial information, pre-trial proceedings are still ongoing.

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