RO SOMMERNES ADVOKATFIRMA DA Roald Amundsens gate 6 Postboks 1983 Vika N-0125 Oslo, Norway
Tel. (+47) 23 00 34 40 Fax. (+47) 23 00 34 50 E-mail [email protected]
www.rosom.no
Oslo, 24th October 2011
REPORT TO KRISTIANSAND CITY COURT1
CASE No.: 11-133328 KON-KISA/07: HUNSFOS FABRIKKER AS, THE WINDING UP ESTATE
1 Office translation: In case of any discrepancy between the report in Norwegian and the report in English, the Norwegian version shall prevail.
RO SOMMERNES ADVOKATFIRMA DA
List of contents 1 ADDRESSES TO WHICH THE REPORT WILL BE SENT...... 3 2 IDENTIFICATION OF WHOM THE CASE CONCERNS ...... 4 2.1 Name...... 4 2.2 Business address ...... 4 2.3 Enterprise number ...... 4 2.4 Branch...... 4 2.5 The Group ...... 4 2.6 Shares/ownership parts in other enterprises /companies ...... 5 3 THE BANKRUPTCY ...... 5 3.1 The legal basis ...... 5 3.2 Petitioning creditor ...... 5 3.3 The closing date pursuant to the Satisfaction of Claims Act Section 1-2 ...... 5 3.4 Closing date for notifying claims ...... 5 3.5 First meeting of creditors ...... 6 4 THE ADMINISTRATOR OF THE WINDING UP ESTATE ...... 6 4.1 The Administrator of the Winding up Estate ...... 6 4.2 The Winding up Estate Auditor ...... 6 4.3 Committee of Creditors...... 6 5 DETAILS OF THE BANKRUPT PARTY ...... 6 5.1 Date of establishment and date of registration ...... 6 5.2 Share capital at establishment and the date on which bankruptcy proceedings were ...... opened 7 5.3 The Company’s shareholders ...... 7 5.4 Chairman of the Board and Members of the Board for the previous two years and the Managing Director for the previous five years ...... 7 5.5 The Auditor ...... 7 5.6 The Accountants ...... 8 5.7 The engagements of leading staff members in other enterprises/activities/companies ...... 8 6 THE COMPANY’S ACTIVITIES ...... 8 6.1 General ...... 8 6.2 Accounting and Accounting Methods & Principles ...... 9 6.2.1 Profit & Loss Accounts (figures in TNOK) ...... 9 6.2.2 Balance Sheet (figures in TNOK) ...... 10 6.3 Activities and number of employees on the date bankruptcy proceedings were ...... opened 12 6.3.1 Last wage payments ...... 12 6.3.2 Balances with employees ...... 12 6.3.3 Information concerning utilisation of the tax deductions account ...... 12 6.4 The date on which insolvency incurred ...... 12 6.5 The causality of the bankruptcy ...... 12 6.6 The Auditor/The Financial Supervisory Authority of Norway ...... 13 7 THE WINDING UP ESTATES POSITION ...... 13 7.1 Assets that are incorporated under the bankruptcy seizure ...... 13 The following is an overview of the assets encompassed under the bankruptcy seizure...... 14 7.1.1 Bank deposits ...... 14 7.1.2 Receivables ...... 14 7.1.3 Goods in stock ...... 14 7.1.4 Real estate ...... 14 7.1.5 Operating equipment, machinery etc...... 15 7.1.6 Other assets ...... 15 7.2 Voidable dispositions ...... 15 7.3 Activities after bankruptcy proceedings were opened ...... 15
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7.4 Sales ...... 15 7.5 The Company’s liabilities ...... 16 7.6 In particular on disputes ...... 16 7.7 Accrued and incurred costs ...... 16 8 THE POSITION OF THE CREDITORS...... 16 8.1 Potential for cover ...... 16 8.2 Examination of claims ...... 17 8.3 Further information to the creditors ...... 17 9 POTENTIALLY PUNISHABLE ACTS OR CIRCUMSTANCES ...... 17 10 CIRCUMSTANCES THAT MAY RESULT IN QUARANTINE ...... 17 11 Actions taken in the administration of the bankruptcy to date – progress plan ...... 18 11.1 The administration of the Winding up Estate to date ...... 18 11.2 Further work in the administration of the Winding up Estate ...... 19 11.3 Information to the Administrator – guarantee for administrative costs ...... 19
* * *
1 ADDRESSES TO WHICH THE REPORT WILL BE SENT
This report will be sent to Kristiansand Bankruptcy Court, with copies sent to:
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- creditors who have lodged claims - the Company’s management & administration
The report will also be published in the bankruptcies section of the Register of Bankruptcies and on Ro Sommernes DA’s Internet pages: www.rosom.no
At this point in time the report will not be forwarded to Oslo Constabulary, Financial & Environmental Crime Section cf. Section 9 below.
2 IDENTIFICATION OF WHOM THE CASE CONCERNS
2.1 Name The debtor is Hunsfos Fabrikker AS. The debtor is also referred to as “the Company” in this report. The debtor’s previous name was Hunsfos Fabrikker ASA (changed in the Register of Business Enterprises on 9th April 2003).
2.2 Business address The Company’s registered business address is Hunsøya, 4700 Vennesla.
2.3 Enterprise number The Company’s Enterprise number is 912 843 513. The Winding up Estate’s Enterprise number is 997 389 573.
2.4 Branch The Company was registered under the branch:
”17120 Production of paper and cardboard”
According to the Company’s articles of association, the Company’s aim was:
“The production of paper and related products, other industrial activities and trade, and all and any activities associated with this - hereunder participation as shareholder or by other means in other companies or enterprises”
The Company’s activities have consisted mainly of industrial activities and trade, hereunder the production of paper.
2.5 The Group The Company was 100 % owned by the German company Baikap Holding 010607 GmbH, Enterprise No. 312 529 148. Baikap Holding 010607 GmbH is a company controlled by the
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German industrial group Bavaria Industriekapital AG. Baikap Holding 010607 GmbH acquired the shares in the Company from the Swiss Cham Paper Group AG on 2nd December 2008 and remained in full ownership of all shares in the Company until bankruptcy proceedings were opened.
2.6 Shares/ownership parts in other enterprises /companies To the best of our knowledge at this point in time the Company has no shares or ownership interests in other enterprises/ companies.
3 THE BANKRUPTCY
3.1 The legal basis Kristiansand Municipal Court’s ruling of 23rd September 2011, at 14.30.
3.2 Petitioning creditor Voluntary debt settlement negotiations in the Company were opened under Kristiansand Municipal Court’s ruling of 24th August 2011. Voluntary debt settlement negotiations failed to result in agreement between the Company and its creditors. Under a ruling passed on 19th September 2011 it was ruled that the Company could open public compulsory debt settlement with its creditors. The Company’s Board of Directors submitted both the petition for voluntary debt settlement negotiations and the petition for public compulsory debt settlement.
Debt settlement negotiations were halted on 23rd September 2011, and bankruptcy proceedings were opened, after the Debt Settlement Committee, by agreement with the Board of Directors of Hunsfos Fabrikker AS, reported to Kristiansand Municipal Court that there was no longer any prospect that the Debtor would be able to achieve a debt settlement arrangement cf. the Bankruptcy Act Section 57 first paragraph No. 1.
3.3 The closing date pursuant to the Satisfaction of Claims Act Section 1-2 The closing date pursuant to the Satisfaction of Claims Act Section 1-2 is stipulated to be 23rd August 2011, cf. the Bankruptcy Act Section 109.
3.4 Closing date for notifying claims The closing date for notifying claims to the Administrator of the Winding up estate var 21st October 2011.
The closing date is not preclusive, thus claims received after the said date will also be registered and subject to processing. Refer also to the Bankruptcy Act Section 115.
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3.5 First meeting of creditors The first meeting of creditors is scheduled for Tuesday 25th October 2011, at 13.00 in courtroom 01 at Kristiansand Bankruptcy Court’s facilities in Tollbodgt. 45 in Kristiansand.
The further administration of the administration of the Winding up Estate will clarify whether it will be necessary to arrange further meetings of creditors.
4 THE ADMINISTRATOR OF THE WINDING UP ESTATE
4.1 The Administrator of the Winding up Estate The appointed Administrator of the Winding up Estate is
Lawyer Håvard Wiker Roald Amundsens gate 6 Postboks 1983 Vika N-0125 Oslo
Telephone: 23 00 34 40 Telefax: 23 00 34 50 E-mail: [email protected]
4.2 The Winding up Estate Auditor Chartered Accountant Per Ødegaard was appointed under the Court’s ruling of 23rd September 2011 as Winding up Estate Auditor.
4.3 Committee of Creditors Trond Ellingsen (representative for the creditors) and Steinar Byremo (representative for the employees) were appointed under the Court ruling of 23rd September 2011 as members of the Committee of Creditors.
5 DETAILS OF THE BANKRUPT PARTY
5.1 Date of establishment and date of registration The Company was established on 17th March 1886. The Company was initially registered in the Register of Business Enterprises on 31st May 1988.
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5.2 Share capital at establishment and the date on which bankruptcy proceedings were opened At this point in the Administrator has not obtained information concerning the amount of share capital on establishment. When bankruptcy proceedings were opened the Company’s share capital was NOK 270 000 000.-. Share capital is registered as fully paid in.
5.3 The Company’s shareholders The Company’s shareholder is the German company Baikap Holding 010607 GmbH (with Norwegian Enterprise No. 312 529 148).
5.4 Chairman of the Board and Members of the Board for the previous two years and the Managing Director for the previous five years At the time bankruptcy proceedings were opened the Board of Directors consisted of:
Hans Magnus Andresen, date of birth 21st September 1957 (Chairman of Board of Directors) Arne Kristian Bentsen, date of birth 5th December 1958 (Member of the Board of Directors) Hilde Merete Solegaard, date of birth 15th June 1959 (Member of the Board of Directors) Stein Solheim Olsen, date of birth 26th January 1959 (Member of the Board of Directors) Wolfgang Lichtenwalder, date of birth 22nd February 1964 (Member of the Board of Directors)
The registered Managing Director was Mark R. F. Gooseman, date of birth 9th December 1958.
Previous Managing Directors: 2nd March 2006 to 10th May 2007: Yngvar Undall 10th May 2007 to 29th November 2007: Per Fodnæss 29th November 2007 to 4th March 2009: Lucius Michael Boner Caviczel 4th March 2009 to 8th June 2011: Jan Tore Våle
Previous Members of the Board of Directors: 10th May 2007 to 4th March 2009: Yngvar Undall 24th September 2007 to 4th March 2009: Nicolas Frochaux
5.5 The Auditor The Company’s auditor was Irevisjon AS, Enterprise No. 965 820 310, Vestre Strandg 32, postboks 664, 4666 Kristiansand. The Auditor responsible for the account was Chartered Accountant Kjell Arnvard.
Previous Auditor: From 7th October 2000 to 28th September 2009: Ernst & Young AS, Enterprise No. 976 389 387, Tullinsgate 2, 0166 Oslo.
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5.6 The Accountants The Company’s own employees have held responsibility for the Company’s accounts. The Company has also employed outside consultants to assist in wage runs etc.
5.7 The engagements of leading staff members in other enterprises / activities / companies Members of the Board of Directors in Norway are registered with posts in the following companies:
Member of the Board of Directors Arne Kristian Bentsen: - Hunsfos Arbeiderforening Avd. 470, Enterprise No. 989 197 614, Manager and Chairman of the Board of Directors.
Member of the Board of Directors Hilde Merete Solegaard: - Hafrsfjordgate 6 I/S, Enterprise No. 871 438 242, Member of the Board of Directors - Sohime Consulting Hilde Merete Solegaard, Enterprise No. 990 283 192, proprietor of a single proprietorship and Chairman of the Board of Directors - Idium AS, Enterprise No. 980 857 646, Member of the Board of Directors - Contendo AS, Enterprise No. 979 571 291, Member of the Board of Directors - Bekk Consulting AS, Enterprise No. 981 566 378, Assistant Manager
6 THE COMPANY’S ACTIVITIES
6.1 General The Company has operated a paper manufacturing company from Hunsøya for more than 125 years. The Company produces various types of special paper for sale in the domestic and international markets. The Company’s management, production and sales where located on Hunsøya in Vennesla. The Company’s stated strategy has been to be a leading manufacturer of uncoated paper for specialist applications that require high quality products and guaranteed delivery times. The Company’s production was re-organised around the year 2000 when Cham Paper Group AG took over ownership of the Company. The factory at Hunsøya has a production capacity of approximately 58 000 tonnes per annum, but this has not been fully exploited. A total of in the region of 46 600 tonnes of paper was manufactured in 2010.
The Company sells the bulk of its products on the export market. Sales are effectuated through the Company’s own sales organisation with support from a network of international agents.
The Company’s customers can primarily be divided into two categories, “tobacco” customers and “non-tobacco” customers. For its tobacco customers the Company manufactures the paper one finds inside cigarette packs together with the thin aluminium foil. This paper is sold to “converters” who then attach the paper to the aluminium foil, making a composite inner lining, prior to this being inserted into the cigarette pack.
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Production for non-tobacco customers is more varied and dependent on the requirements of the individual customer. Paper is manufactured and sold for amongst other applications food packaging and paper for transferring colour prints to textiles.
We also mention here that during the course of recent decades the Company has been through several downsizing processes, and that at the most the Company had in the region of 1 200 employees. The Company was also previously engaged in the production of cellulose etc.
6.2 Accounting and Accounting Methods & Principles
6.2.1 Profit & Loss Accounts (figures in TNOK) 2010 2009 2008 2007 2006 Revenues Income from sales 354 642 328 180 363 385 430 121 372 563 Other operating income 1 353 2 247 4 410 -11 380 12 367 Sum revenues 355 995 330 427 367 795 418 741 384 930 Costs Changes in stocks of goods in production and finished goods 2 982 1 081 16 510 -6 020 -4 009 Changes in stocks of self- manufactured fixed assets Cost of materials 221 227 155 979 207 541 181 409 293 788 Payroll costs 70 768 73 933 84 594 84 461 91 562 Write down of fixed assets and intangible assets 8 352 9 650 11 753 12 389 17 922 Depreciation of permanent fixed assets and intangible fixed assets 0 0 8 000 6 500 120 553 Other operating costs 92 613 72 064 85 216 123 867 12 465 Sum costs 395 942 312 707 413 614 402 606 532 281 Operating result -39 947 17 720 -45 819 16 135 -147 351 Financial revenues Income on investments in associated companies 0 0 0 0 -34 Other earnings on interest 666 144 552 1 214 260 Other financial revenues 13 425 22 131 4 451 8 709 10 253 Sum financial revenues 14 091 22 275 5 003 9 923 10 479 Financial costs Interest payable to companies in the same group 0 0 0 0 2 327 Other interest expenditure 2 723 2 681 3 221 3 907 6 626 Other financial costs 10 095 11 434 9 716 9 894 13 030 Sum financial costs 12 818 14 115 12 937 13 801 21 983 Net finance 1 273 8 160 -7 934 -3 878 -11 504 Profit & loss before tax -38 674 25 880 -53 753 12 257 -158 855 Profit & loss after tax -38 674 25 880 -53 753 12 257 -158 855
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Result from extraordinary items Annual result for minority interests -38 674 25 880 -53 753 12 257 -158 855 Minority interests 0 0 0 0 Profit/loss for the year -38 674 25 880 -53 753 12 257 -158 855 Transfers and disposals Transfer to/from fund for assessed differences 0 0 0 0 -34 Transfers to/from other equity -38 674 25 880 -53 753 12 257 -158 822 Sum transfers and dispositions -38 674 25 880 -53 753 12 257 -158 856
6.2.2 Balance Sheet (figures in TNOK)
6.2.2.1 Assets (figures in TNOK) 2010 2009 2008 2007 2006 ASSETS Fixed assets Intangible fixed assets Tangible fixed assets Land, buildings and other fixed property 512 545 603 886 1 396 Investment property Machinery and plant 61 976 64 864 71 780 0 Operating equipment, inventory, tools, office machines and similar 307 816 0 89 080 103 195 Sum tangible fixed assets 62 795 66 225 72 383 89 966 104 591 Fixed asset investments Loans to group undertakings 3 240 0 0 0 Investments in associates 0 0 660 647 647 Bonds and other claims 0 0 4 500 4 500 Sum fixed asset investments 3 240 0 5 160 5 147 647 Sum fixed assets 66 035 66 225 77 543 95 113 105 238 Current assets Stocks Stocks 35 195 22 451 39 888 57 423 57 994 Biological assets Sum stocks 37 093 46 845 41 409 61 613 57 994 Receivables Trade receivables 64 110 64 919 64 075 55 121 12 121 Other receivables 14 480 12 492 10 672 9 283 10 844 Group receivables 0 0 0 0 6 756 Sum receivables 78 590 77 411 74 747 64 404 29 721 Bank deposits, cash and similar Bank deposits, cash and similar 23 637 49 306 2 263 15 669 26 685 Sum current assets 139 320 173 562 118 419 141 686 114 400 SUM ASSETS 205 355 239 787 195 962 236 799 219 638
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6.2.2.2 Equity and liabilities (figures in TNOK)
2010 2009 2008 2007 2006 Equity Called up and fully paid in share capital Nominal share capital 270 000 270 000 270 000 270 000 200 000 Other paid in capital 70 000 Sum called up and fully paid in share capital 270 000 270 000 270 000 270 000 270 000 Retained earnings Revaluation reserve 0 0 449 436 Reserve for non-realised earnings Other equity -223 631 -184 957 -210 837 -157 070 Uncovered losses 169 329 Sum retained earnings -223 631 -184 957 -210 388 -156 634 -168 893 Sum equity 46 369 85 043 59 612 113 366 101 107 Long-term liabilities Pension commitments 4 510 9 879 9 961 10 048 8 673 Sum allocations for commitments 4 510 9 879 9 961 10 048 8 673 Other long-term liabilities Debts to credit institutions 0 23 608 26 559 15 608 28 865 Long-term group liabilities 4 050 0 0 0 0 Other long-term liabilities 15 074 0 0 0 Sum other long-term liabilities 19 124 23 608 26 559 15 608 28 865 Sum long-term liabilities 23 634 33 487 36 520 25 656 37 538 Short-term liabilities Debts to credit institutions 49 972 39 944 18 995 3 937 1 880 Trade creditors 63 429 59 741 58 352 64 342 59 979 Due, unpaid government charges and special taxes 4 826 4 714 5 076 5 911 5 534 Short-term group liabilities 0 0 0 4 270 0 Other short-term liabilities 17 125 16 858 17 407 19 317 13 600 Sum short-term liabilities 135 352 121 257 99 830 97 777 80 993 Sum liabilities 158 986 154 744 136 350 123 433 118 531 SUM EQUITY AND LIABILITIES 205 355 239 787 195 962 236 799 219 638
The annual accounts for the years up to and including 2010 have been audited and submitted to the Register of Accounts. The Tax Returns for the Company have been submitted up to and including the accounting year 2010.
We mention here that the Company accounts at the time bankruptcy proceedings were opened were very close to being completed. In later reports the Administrator will report on the
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Company’s key figures from the Balance Sheet Report and from the Profit & Loss Accounts at the time bankruptcy proceedings were opened.
The Company has submitted period reports for tax deductions, employer’s charges and value added tax up and including the 4th tax period 2011.
6.3 Activities and number of employees on the date bankruptcy proceedings were opened At the time bankruptcy proceedings were opened the Company had 129 employees and production had been halted. There was some activity in the Company, including the sale of finished goods and that machinery and plant/equipment was undergoing a run-down process to ensure that the halt in production caused as little risk as possible for damage and diminished worth to/of machinery % equipment. The employees received formal notice of termination of employment in the correct form and format from the hand of the Administrator on 26th September 2011.
6.3.1 Last wage payments The last regular payment of wages as on 22nd September 2011. Regular wages for September and overtime for August 2011 was paid to employees.
6.3.2 Balances with employees At this point in time we have no information concerning unsettled balances with employees. The degree to which unsettled balances with employees exist will be the subject of further investigation in the continuing administration of the Winding up Estate.
6.3.3 Information concerning utilisation of the tax deductions account The Company has held an account for deducted tax with DnB Nor Bank ASA. The tax deductions account was in use.
6.4 The date on which insolvency incurred Pursuant to Section 61 of the Norwegian Bankruptcy Act grounds for insolvency exist when "the debtor is unable to pay his debts when they fall due, unless insolvency must be assumed to be temporary in nature. Nevertheless, insolvency does not exist when the debtor's assets and earnings together are assumed to be able to fully cover the debtor's obligations, even though the fulfilment of the obligations will be delayed by the fact that his debts have to be covered by the sale of asset”.
It is not possible at this point in time to estimate the date on which insolvency incurred. This is a matter the Administrator, in consultation with the Winding up Estate Auditor, will examine more closely in connection with his ongoing tasks.
6.5 The causality of the bankruptcy As mentioned above, the Company petitioned Kristiansand Municipal Court for voluntary debt negotiations, which was followed by public compulsory debt settlement. The Administrator will,
Report in case N.: 11-133328 KON-KISA/07: Hunsfos Fabrikker AS, bankruptcy Page 12 of 21 RO SOMMERNES ADVOKATFIRMA DA after a carrying out a more in depth examination of the factual and financial information available, and in consultation with the Winding up Estate Auditor, determine the causality of the bankruptcy.
The indirect main causes of the Company’s financial problems are, according to the Board of Directors and the Company’s management, substantial increases in the cost of raw materials. A major part of the Company’s costs in the production of goods relate to pulp (cellulose). Pulp prices started to rise towards the close of 2009, and by the change of year 2010/2011 the price of pulp was approximately EUR 635.- per tonne. In comparison to this, the Company achieved a sale price average of around EUR 1 000.- per tonne for the products.
The production of paper is an energy-intensive process, and the Company’s energy costs also rose during the same period. Pulp and energy, together with payroll costs, represent the highest costs borne by Company.
The Company has had a number of major agreements with customers that are negotiated for periods of minimum one year at a time. The agreements do not include clauses on price adjustments in accordance with rises in the cost of raw materials. The Company has attempted to negotiate price adjustments with its customers, but the Company has to a high degree borne the risk for increased costs with no corresponding increases in sales prices.
In addition to the factors mentioned above, fluctuations in the currency market have also had a negative effect on the Company’s result.
6.6 The Auditor/The Financial Supervisory Authority of Norway Thus far we have not assessed in any depth whether circumstances exist that may indicate a reaction on the part of the Financial Supervisory Authority of Norway against the Company’s Auditor. However, on the basis of the overview we currently have to hand, it would seem that this is unlikely. We therefore find no good reason at this point in time to forward this report to the Financial Supervisory Authority of Norway (cf. the Bankruptcy Act Section 122 a).
7 THE WINDING UP ESTATES POSITION
7.1 Assets that are incorporated under the bankruptcy seizure The standard routines have been initiated with regard to investigations with enquiries to banks, insurance companies, public registers and so forth in order to clarify whether the Company is in possession of assets.
On 23rd September 2011 the Administrator of the Winding up Estate carried out a formal inspection of the Company’s facilities on Hunsøya. On the same day the Administrator of the Winding up Estate engaged an assistant to the Administrator, Motorcompaniet AS to prepare and implement the registration of assets at the Company’s facilities on Hunsøya.
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The following is an overview of the assets encompassed under the bankruptcy seizure.
7.1.1 Bank deposits The Company’s main banker was DnB Nor Bank ASA, and the Company has held several accounts in the bank. In addition to this the Company has held accounts in Storebrand Bank and Nordea Bank Norge ASA.
At the time bankruptcy proceedings were opened the Company held bank deposits of NOK 15 475 474.-. The Company also held MEUR 1 in a separate account as surety for deliveries from the pulp supplier Södra Skogsägarna ekonomisk forening. The Company also had EUR 500 000 in an account in DnB NOR Bank ASA.
Work is ongoing to attain a full overview of all the Company’s bank accounts, hereunder whether the Company has commitments or obligations to the various banks that may be counter-balanced against the deposits. The Administrator also mentions that the Winding up Estate has incurred some costs for amongst other items wages to be paid to employees that are assisting the Administrator, costs of energy, hereunder heating, administrative costs in connection with the sale of stocks and the recovery of trade receivables etc. The Administrator has also arranged for a number of bank accounts to be established in connection with the bankruptcy.
7.1.2 Receivables At the time bankruptcy proceedings were opened the Company had outstanding trade receivables on the book of NOK 27 587 423.- (with non-saleable stock allocations of NOK 750 000.- taken into account). Not all receivables have fallen due for payment, and work is ongoing to recover the receivables. The Company’s receivables are liened to the advantage of SG Factoring (with 1st priority) and to Innovation Norway (with 2nd priority as surety for their claim of NOK 16 396 708.-). SG Factoring no longer has any claim against the Company as a result of receipts of that company’s financed receivables.
In addition to the receivables mentioned above are any prepayments the Company has made. Work is ongoing to attain an overview of these and the amounts involved, if any.
7.1.3 Goods in stock At the time bankruptcy proceedings were opened the Company had goods in stock of a total worth of approximately MNOK 30. The goods in stock were comprised of saleable goods, goods that are difficult to sell, faulty production and raw materials. The worth of the stock is uncertain due to amongst other reasons the situation the Company is in. Work is ongoing to realise the goods in stock. Innovation Norway has lien in the goods as surety for their claim of NOK 16 396 708.-.
7.1.4 Real estate The Company is the owner of the deeds to a number of properties. Amongst other property the Company owns large areas of Hunsøya where production took place. The Company also owns an ideal share in a cabin in the Municipality of Bykle and a number of properties in Kristiansand and
Report in case N.: 11-133328 KON-KISA/07: Hunsfos Fabrikker AS, bankruptcy Page 14 of 21 RO SOMMERNES ADVOKATFIRMA DA the Municipality of Vennesla. The actual worth of the properties is extremely difficult to estimate for amongst other reasons that a number of the properties have proved impossible to map out and a number of them are smaller areas that remain after property divisions, and that the worth of the operational properties will depend on whether production is re-established on Hunsøya. We mention here that Innovation Norway holds lien in the operational properties as surety for their claim of NOK 16 396 708. -.
7.1.5 Operating equipment, machinery etc. The Company owns a variety of operating equipment and machinery including 3 paper manufacturing machines, 4 industrial rotary paper cutting machines, a number of trucks, tools, spare parts and so forth. The actual worth of the equipment is difficult to estimate, and will depend to some degree on whether production can be re-established on Hunsøya. Much of the stock of spare parts has little or no value unless production is recommenced. Further, the cost of dismantling the Company’s paper manufacturing machines can be high. It is too early to be able to make any concrete estimates of the actual value of the operating equipment.
7.1.6 Other assets Work is ongoing to attempt to clarify whether there are additional assets that can be placed under the auspices of the Winding up Estate. This will be determined in the ongoing work of the administration of the Winding up Estate.
7.2 Voidable dispositions We have not thus far carried out in depth investigations into whether there may be voidable dispositions. This will be the subject of investigations in the continuing work of the Administrator.
7.3 Activities after bankruptcy proceedings were opened As stated above, production was halted when bankruptcy proceedings were opened.
The Administrator of the Winding up Estate has not resumed production. Some activities are being carried out on Hunsøya, amongst these the sale of the stock of goods and that trade receivables are being recovered. A number of maintenance tasks are also being carried out, as are inspections of the Company’s machines and equipment. In connection with this the Administrator has engaged 16 of the Company’s previous employees on a temporary basis to assist the Administrator in this work. Employees that are working during their period of notice, or who have been re-engaged by the Administrator, are paid directly by the Winding up Estate.
7.4 Sales As of today’s date the Administrator has not sold any of the Company’s assets. Work has continued without pause since the opening of debt settlement negotiations on the possibility of selling the enterprise. This work continues, and it is too early to form an opinion as whether success in this will be achieved. Work is also being carried out at the same time on the sale of the Company’s fixed property, machinery etc. It is presumed that whether it will be possible to sell the enterprise will be clarified before the close of the current year.
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7.5 The Company’s liabilities 136 claims against the Winding up Estate have been received to date.
These are distributed as follows:
Secured claims NOK 17 545 240,88 Preferential claims, first class NOK 104 963 436,89 Preferential claims, second class NOK 2 195.00 Sum NOK 122 510 872.77
There are also grounds to presume that Södra Skogsägarna ekonomisk forening (Södra) is the largest creditor in the Winding up Estate, with a total claim of NOK 32 084 001.81. The said creditor has in the meantime, as mentioned above, part surety for the claim in the form of a deposit in an account in DnB NOR Bank ASA.
The time limit for notifying claims against the Winding up Estate has just expired and it is expected that more claims will be received. We mention that for example no claims against the Winding Up Estate from employees have thus been received.
7.6 In particular on disputes According to information received the Company has been sued by Cellulose Beira Industrial (Celbi) S.A. for lack of payment of two invoices totalling USD 1 300 351.06. The Company has entered pleadings that the Court must find for the Defendant. The dispute was raised by a petition dated 31st January 2011. Procedural matters relating to the dispute are being processed by the Agder Court of Appeal, but as of today no clarification has resulted.
7.7 Accrued and incurred costs As of today’s date costs have been incurred in connection with the administration of the Winding up Estate relating to fees for Administrator and travelling expenses in connection with the Administrator’s visit to Hunsøya. Costs have also been incurred relating to wages for the employees who are assisting with the realisation of the stocks and recovery of the Company’s trade receivables. Some running costs are also incurred for amongst other items energy etc. to ensure that the Company’s assets are not diminished.
8 THE POSITION OF THE CREDITORS
8.1 Potential for cover On the basis of information currently to hand it is probable that the Winding up Estate will provide dividends to preferential claims (first class). Until clarification concerning the realisation of the properties, operating equipment and machinery is achieved, together with clarification of
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8.2 Examination of claims No examination of claims has thus far been carried out.
In order to protect the best interests of the creditors and any rights these may have, and to assess whether there is information of interest in connection with the administration of the Winding up Estate, notified claims are perused as and when they are received by the Administrator’s office. Claims will not be recommended if it is obvious that the claim will not achieve cover from the Winding up Estate, cf. the Bankruptcy Act Section 110 third paragraph. Claimants whose claims are not recommended will be notified by the Administrator of the Winding up Estate.
Creditors who wish to receive further information concerning the claims that have been received, or who wish to examine the list of claims, will be granted access to this by application to the Administrator of the Winding up Estate, cf. the Bankruptcy Act Section 110 fourth paragraph.
8.3 Further information to the creditors It is not possible at this point in time to say whether further reports before the administration of the Winding up Estate is concluded. Reports will be published on the bankruptcy pages of www.altinn.no. Registered creditors will be authorised to download reports, and will be able to log in using their enterprise registration number/social security number. The report will also be published on the Internet pages of Ro Sommernes advokatfirma DA: www.rosom.no under the flag “Bankruptcies”.
A copy of the final report will be sent to amongst others creditors who have lodged claims.
9 POTENTIALLY PUNISHABLE ACTS OR CIRCUMSTANCES The Administrator has thus far not identified punishable offences in connection with the operation of the Company. The Administrator will look in more depth into this in the continuation of his work.
10 CIRCUMSTANCES THAT MAY RESULT IN QUARANTINE Thus far we have not received any information that provides grounds for recommending that the Company’s officers are subjected to bankruptcy quarantine. The Administrator of the Winding up Estate will return to the matter after completing further investigations.
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11 Actions taken in the administration of the bankruptcy to date – progress plan
11.1 The administration of the Winding up Estate to date As can be seen from the above, work carried out in the initial phase of the administration of the Winding up Estate has been concentrated on attempting to acquire an overview of the situation, hereunder an overview of the Company’s assets.
Amongst other things, a number of routine procedures and investigations have been initiated such as notifications to various public bodies and authorities, banks, insurance companies and so forth.
We have also had meetings and telephone conferences with suppliers, customers, banks, creditors, representatives of the Company’s Board of Directors, the Company’s management and lien holders to enable an assessment of further progress and potential alternative solutions with regard to the transfer of the Company’s activities to be carried out.
Administration of the Winding up Estate has been extremely comprehensive. The bulk of the work done so far has been concentrated on gaining an overview of the Company and its assets. One main area of focus for the Administrator’s work has been to seek out possibilities for the transfer of the Winding up Estate’s activities. This is to secure vital social interests such as workplaces and so forth.
The work of acquiring an overview of the Company’s actual current and financial situation has been comprehensive. We have examined documents that are relevant in assessing the Company’s position.
We have worked intensively on recovering the Company’s trade receivables. The Company’s trade receivables have, up to the date voluntary debt settlement negotiations commenced, been financed by SG Factoring. Against the background of the Company’s financial situation, SG Factoring notified termination of its agreement to the Company a short time after voluntary debt settlement negotiations commenced.
We have introduced new sales terms for deliveries executed after the opening of voluntary debt settlement negotiations in the Company. As the Company had a number of orders from customers on its books when voluntary debt settlement negotiations commenced, new sales and delivery term were necessary in order to avoid the Company’s customers counter-balancing potential claims against deliveries of new sales. New terms were also introduced for the Company’s suppliers, based on corresponding principles, so that goods purchased after voluntary debt settlement negotiations commenced were paid in cash (with the consequence that suppliers did not have the option of counter-balancing the Company’s payments against previous debts).
When voluntary debt settlement negotiations were opened, SG Factoring had, on behalf of the Company, unpaid trade receivables of more than MNOK 57. The Company’s debts to SG Factoring at the same point in time were in the region of MNOK 34. As of 19th October 2011
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SG Factoring has, on behalf of the Company, unpaid trade receivables of approximately MNOK 11. The Debtor’s disposable sum with SG Factoring is as of 19th October 2011 approximately MNOK 5. Over the course of the voluntary debt settlement negotiation period and the administration of the Winding up Estate thus far a total of almost MNOK 40 in trade receivables has thus been recovered.
We have also cancelled the Company’s current agreements, and had ongoing correspondence/dialogue with the Company’s bank. Further, as mentioned above, we have given notice as stated above, of none-subrogation by the Winding Up Estate, cf. the Satisfaction of Claims Act Section 7-10, in the Company’s lease contracts. Decisions on abandonment have been taken, cf. the Bankruptcy Act Section 117b.
The Company’s employees have also been informed of their rights and that the Administrator will not take up their employment contracts. At the time bankruptcy proceedings were opened the company had 129 employees, all of whom have received correct, formal notice of termination of employment. We have had a considerable workload relating to wage guarantee cases, hereunder assisting employees in completing application forms.
11.2 Further work in the administration of the Winding up Estate The Administrator’s further tasks are quite comprehensive and will in the immediate future be concentrated on following up the tasks mentioned in the above. Particular effort will be expended on following up parties with a potential interest in the Company and its activities, hereunder to realise the Company’s assets.
We are currently still in the initial phase of the administration of the Winding up Estate and it is not possible at this point in time to provide any indication of when the administration of the Winding up Estate can be finalised.
Kristiansand Bankruptcy Court will be kept fully informed on the administration of the Winding up Estate in accordance with the ordinary reporting routines, cf. the Bankruptcy Act Section 120.
11.3 Information to the Administrator – guarantee for administrative costs
If any recipient of this report is in possession of information that he/she believes may be of interest in connection with the handling of the Winding up Estate, we kindly request that the Administrator be contacted without delay.
24th October 2011
______Håvard Wiker Trond Ellingsen Steinar Byremo The Administrator of the Member of the Committee of Member of the Committee of Winding up Estate Creditors Creditors (sign.) (sign.) (sign.)
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DECLARATION BY THE COMPANY
The undersigned hereby declares in accordance with the Bankruptcy Act Section 120, second paragraph, second sentence, that information contained in this report relating to the Company’s financial circumstances are to the best of my knowledge correct and exhaustive.
Oslo, . October 2011
______Hans Magnus Andresen (sign.)
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REGISTRATION PROCEDURE
Pursuant to the Bankruptcy Act. Section 85 first paragraph No. 1 and 101, cf. Section 80 Case No.: 11-133328KON-KISA/07: Hunsfos Fabrikker AS, The Winding Up Estate
Presented at the first meeting of creditors in the Winding up Estate, cf. the Bankruptcy Act Section 78 first paragraph No. 3, den 25.10.2011. The registration procedure is conducted in the period after bankruptcy proceedings were opened. The registration procedure is fully documented with a list of all operating equipment, equipment and so forth prepared by Motorcompaniet AS. The following is a general list of the Debtor’s assets.
Assets Valuation (in NOK) Operating equipment The value of the equipment and spare parts is not currently known and will depend on whether production recommences. Stocks of goods At the time bankruptcy proceedings were opened stocks were entered in the accounts with a total value of NOK 30 654 466.-, divided by raw materials (NOK 5 200 392.-), material (NOK 13 336 072.-), goods in progress (NOK 10 711.-), and finished goods (NOK 12 107 291.-). Bank accounts At the time bankruptcy proceedings were opened the Company had bank deposits of NOK 15 475 474.- (incl. deducted tax) in DnB NOR. In addition, an account with EUR 500 000.- in DnB NOR. The Company also had funds in DnB NOR, in separate accounts, that in all probability are of little or no value to the Winding up Estate, as the funds are lodged as surety/guarantee for certain of the Company’s obligations. Receivables Trade receivables at the time bankruptcy proceedings were opened were entered as NOK 27 587 423.- (incl. non-saleable stock allocations of NOK 750 000.-). Refundable VAT of NOK 479 126.-. There is also a list of receivables that the Winding up Estate is unsure represents any worth. Fixed property The value of the properties is not yet determined, and will depend to some degree on whether production is re-established.
*** We hereby declare upon our honour that this registration of the Debtor’s assets is to the best of our knowledge correct and exhaustive.
Oslo, 24th October 2011
Debtor The Administrator of the Winding up Estate
______Hans Magnus Andresen Håvard Wiker (sign.) (sign.)
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