The Austrian commercial court in Vienna yesterday upheld Gloucester Engineering Corp.'s proposed settlement to creditors of its bankrupt European subsidiary, Gloucester Engineering Europe.
Creditors of Vienna-based Gloucester Engineering Europe had voted in September to accept a proposal from the Gloucester, Mass.-based company that would see creditors receive 30 percent of the total monies owed. In that proposal, Gloucester Engineering Corp. — now owned by U.S. private equity group Blue Wolf Capital Partners — would pay out around 360,000 euros ($495,000).
That vote was challenged by Rapperswill, Switzerland-based Swiss Winding Invention, which claimed that its higher offer of 530,000 euros ($728,000) had not been given consideration.
Swiss Winding manufactures high-end film winders. It took on some former Gloucester Engineering Europe employees to provide service support to the machinery maker's European customers.
However, the Austrian appeal court ruled Nov. 10 that, given the still unresolved issue of ownership of some of Gloucester Engineering Europe's intellectual property, accepting Gloucester Engineering Corp.'s quick settlement was in the best interest of creditors.
“It feels good to have this distraction behind us,” said Michael Ranson, a partner in Blue Wolf.
“We're happy that the court agreed with our position, and we're very appreciative of all the customers in Europe that have stood by Gloucester through this period. They can expect Gloucester to be a significant player in the European market and continue providing them great service.”
The Austrian court ruling is 100 percent binding and means that bankruptcy proceedings in respect of Gloucester Engineering Europe, which commenced in March, are now lifted. Ownership of all IP, together with equity in Gloucester Engineering Europe, remains with Gloucester Engineering Corp.
Swiss Winding Invention Chairman Carlos Martinez said he accepted the court decision. “We are happy that this is now over. I have the human capital and we are servicing the [Gloucester Engineering] machines worldwide,” he told European Plastics News.
Martinez said that Swiss Winding Invention does not have an official agreement with Gloucester Engineering Corp. in the U.S. covering servicing of equipment, but that will not prevent his organization from continuing to provide service support.