2024 Oct 07

Harju County Court made a decision regarding the reorganization plan of PlusPlus Capital

On October 4, 2024, the Harju County Court unexpectedly refused to approve the reorganization plan of AS PlusPlus Capital, which had garnered broad support from creditors and investors. In its refusal to approve the plan, the court relied almost exclusively on the largely arbitrary objections raised by Balcia Insurance SE during the reorganization proceedings, which distorted the actual facts. This decision was made despite the fact that the claim held by Balcia Insurance SE constitutes only 0.2% of all claims covered by the reorganization plan.

AS PlusPlus Capital considers it unacceptable to establish a legal practice where the unconstructive criticism of minor creditors with an insignificant share is given priority over the support of the majority of creditors regarding the feasibility of the reorganization plan and the financial forecasts included within it. Due to the specifics of the reorganization process, the majority of creditors who supported the plan do not actively participate in the proceedings and cannot express their support after voting in favor of the plan. Meanwhile, creditors who raised objections are allowed to continually attack the reorganization plan throughout the entire process and promote their agenda without facing criticism. Nevertheless, the objective fact remains that creditors of AS PlusPlus Capital, representing over 90% of the claims covered by the reorganization plan, supported its approval, thereby clearly expressing their backing for the restructuring of AS PlusPlus Capital. It is extremely regrettable that, in this situation, the court has found it possible to disregard the will of the majority and base its decision on the unfounded claims of a single creditor.

AS PlusPlus Capital, based on its initial analysis of the court’s ruling, remains optimistic about the prospects of appealing the decision and believes it is realistic to overturn the erroneous conclusions made by the Harju County Court, thereby securing approval for the reorganization plan.

Although the delay in approving the plan inevitably postpones the start of payments outlined in it, AS PlusPlus Capital is continuing to take all reasonable measures to protect the interests of creditors. This includes building the necessary financial reserves to ensure that the delay caused by the legal proceedings does not lead to an equivalent extension of the plan’s execution timeline in the future.

As a result of the rejection of the reorganization plan and the termination of the reorganization proceedings, the Harju County Court, based on an application by Balcia Insurance SE, also appointed a temporary trustee for AS PlusPlus Capital. The trustee has been tasked with submitting a report to the county court by November 29, 2024. AS PlusPlus Capital is not permanently insolvent, and there are no grounds for declaring insolvency, which is why AS PlusPlus Capital will also contest these procedural decisions.

AS PlusPlus Capital is confident that the approval of the reorganization plan will be achieved, making it unnecessary to address Balcia Insurance SE’s bankruptcy petition substantively. AS PlusPlus Capital reiterates that a bankruptcy scenario would directly harm the interests of its creditors, as it would result in significantly lower satisfaction of claims compared to the proposed reorganization plan.