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Dentons Assists Motorpal With Emergence From Insolvency

Dentons Assists Motorpal With Emergence From Insolvency

Czech Republic
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Dentons has advised automotive parts manufacturer Motorpal on the successful implementation of a pre-pack reorganization.

Motorpal is a manufacturer of fuel injectors for diesel engines. The company’s products include injection pumps, injection valves for diesel engines, and other products supplied to vehicle producers (including balancing shafts, piston pins, and tappets). Major customers include Zetor, Deutz, and MMZ. Motorpal has production plants in Jihlava, Jemnice, Batelov and Velke Meziricí. It has almost 1,250 employees. In 2016, the company celebrated its 70 year anniversary.

With Dentons' assistance, and after successful negotiations, approval, and implementation of the reorganization plan, the company has now emerged from insolvency. As a result, Dentons reports, Motorpa will save more than 1200 jobs in an economically disadvantaged region of the Czech Republic.  The Motorpal case is the first successful pre-pack reorganization in the Czech Republic to obtain the strong support of senior secured lenders.

“We are happy about the outcome of the case," said Dentons Partner Jiri Tomola, the Head of Dentons’ Restructuring, Insolvency and Bankruptcy practice in Prague. "It's a great success for both Motorpal and its creditors, and for the Czech economy. Having represented Motorpal throughout this long journey, we believe the company has great potential and the restructuring has added significant impetus for further development. The case is also important from a legal perspective. It will serve as a precedent and create more space for the use of pre-packed reorganization in practice.”

Motorpal filed its insolvency petition together with a reorganization plan with the Regional Court in Brno on January 15, 2016. Despite the fact that the pre-pack reorganization plan had the overwhelming support of the creditors, the regional court in Brno rejected it based on formalistic grounds. Dentons successfully represented the client at the Constitutional Court of the Czech Republic, claiming that the Regional Court’s rejection of the plan violated the client’s right to a fair trial. The Constitutional Court found in favor of Motorpal – overturning the Regional Court’s decision and allowing the company to resubmit its reorganization plan. The plan was approved by the majority of secured and unsecured creditors and obtained approval from the Regional Court in September 2016. 

On February 21, 2017 the Regional Court in Brno issued a resolution stating that Motorpal had fulfilled its reorganization plan and was out of insolvency.

Due to the complexity of this restructuring deal, Dentons reports, the firm "brought together a cross-practice team including Restructuring, Insolvency and Bankruptcy, Corporate, Banking and Finance, and Litigation and Dispute Resolution." The firm's team, led by Tomola, included Counsel Juraj Alexander (who left the firm during the transaction), Associates Vaclav Zalud and Martin Fronek, and Junior Associates Vojtech Novak, Katarina Kucharovicova, and Jan Kralicek.

Czech Republic Knowledge Partner

HAVEL & PARTNERS, attorneys-at-law, with offices in Prague, Brno, Bratislava, Pilsen, Olomouc, and Ostrava, has a team of 220 lawyers, tax advisors and 500 employees in total, is the largest independent law firm in Central Europe.

Our clients include large international companies, leading Czech and Slovak firms, including strategic state-owned companies and public sector authorities, as well as medium-size businesses, individual entrepreneurs, and investors. We advise approximately 100 of the Fortune 500 companies, and almost 50 of the Czech Top 100 companies. HAVEL & PARTNERS currently provides its services to a total of 2,000 clients. We have the most comprehensive international support available to both Czech and Slovak law firms. We provide legal and tax advice in 12 world languages in more than 90 countries around the globe. Up to 70 % of the transactions we deal with involve an international aspect.

HAVEL & PARTNERS was named the best law firm operating in the Czech Republic by the prestigious British rating agencies Chambers and Partners (2020) and Who’s Who Legal (2018, 2019). It is also the most successful law firm, providing the most comprehensive legal services in the Czech Republic and Slovakia, based on the total number of all nominations and awards in all years of the Law Firm of the Year awards. The firm became the absolute winner of this competition four times in the last six years, receiving the main award Domestic Law Firm of the Year in the Czech Republic (2015, 2017, 2018, 2020) and ranking as one of the most recommended law firms in all categories of law. Our company is also a three-time winner of the Law Firm of the Year award for Best Client Services (2015, 2016, 2019). In the field of M&A, HAVEL & PARTNERS is the best law firm in the Czech Republic based on the annual International Advisory Experts awards (2018, 2019). In Slovakia, it also won the prestigious global M&A Today Awards (2013–2018) for Mergers & Acquisitions six times in a row, and repeatedly won first place in the ranking by Lawyer International Legal 100 (2017, 2018). Prestigious international rating agencies EMIS DealWatch and Mergermarket have ranked HAVEL & PARTNERS among the leading law firms by the number of transactions completed in the entire CEE region since 2009. Based on annual awards of the Acquisition International magazine, HAVEL & PARTNERS has become the Law Firm of the Year 2019 in the M&A category in the CEE region.

Firm's website: https://www.havelpartners.cz/en/

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