A&O Shearman Advises Insolvency Administrator on Transfer of DOMO Caproleuna to Rescue Vehicle

A&O Shearman advised the insolvency administrator of the German entities of DOMO Chemicals, Prof. Dr. Lucas F. Flöther, in connection with the transfer of the DOMO Caproleuna chemical plant to a rescue vehicle established by InfraLeuna and LEUNA-Harze. The transaction, effective April 1, transfers operations and the Leuna real estate to the acquiring entity, which will operate under the name LEUNA-Polyamid GmbH. The purchaser is taking over 436 of the most recent approximately 500 employees. The insolvency administrator reached an agreement with the works council on a reconciliation of interests that includes a social compensation plan. The transfer follows insolvency filings by the three German subsidiaries of the DOMO Chemicals group on December 25 after financing discussions with lenders failed. Because of significant safety and environmental risks, a short-term shutdown of the Leuna production facilities could not be carried out responsibly; the State of Saxony-Anhalt therefore ordered a temporary emergency operation that allowed the plant to continue operating until the investor solution was implemented. In the meantime, the competent insolvency court has opened insolvency proceedings over the three German entities. The restructuring takes place against a backdrop of prolonged strain in the chemical industry, further aggravated by high energy prices, structural overcapacity and increasing competitive pressure. Various investor and rescue solutions were evaluated to limit the negative impact on employees, the Leuna production site and the closely interconnected regional chemical cluster. DOMO Caproleuna GmbH manufactures basic organic products including caprolactam, phenol and acetone, and produces polyamide 6 (nylon 6) as its principal product. Polyamide 6 is used in components for the automotive, electrical and electronics sectors and high-quality consumer goods. A&O Shearman represented the insolvency administrator of the German entities of DOMO Chemicals, Prof. Dr. Lucas F. Flöther, with a team composed by: partners Dr. Josef Parzinger (Restructuring/Banking & Finance) and Dr. Hendrik Röhricht (Private Equity/M&A), both Munich; partners Dr. Udo Herbert Olgemöller (Public Law), Peter Wehner (Employment) and Dr. Heike Weber (Tax), all Frankfurt; partner Dr. Christian Hilmes (Real Estate), Hamburg; counsel Dr. Daniel Bolm (Real Estate) and Dr. Ioannis Thanos (Antitrust), both Hamburg; senior associates Dr. Veronika Gaile (Corporate/M&A), Stephan Bühner (Public Law), Dr. Sven Gunkel (Employment) and Felix Fitschen (Real Estate Finance), all Frankfurt; senior associate Anna Kräling (IP/IT), Düsseldorf; associates Clara Wrede and Eric Bremer (both Restructuring/Banking & Finance); associates Benedikt Wagner, Antonia Waltz and Sebastian Gerstner (all Corporate/M&A, Munich); associates Daniel Lenz, Dr. Lukas Klug and Johann Hornberg (Corporate/M&A); associates Sarah Weber and Janina Müller (Public Law); Dr. Jan Henrich (Employment); and Sven Lücke (Real Estate Finance, all Frankfurt).

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A&O Shearman Advises Insolvency Administrator on Transfer of DOMO Caproleuna to Rescue Vehicle

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A&O Shearman Advises Insolvency Administrator on Transfer of DOMO Caproleuna to Rescue Vehicle

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