The company revealed this week that administration proceedings had been started for Paperlinx Deutschland GmbH and its immediate parent entity Deutsche Papier Holding GmbH on Monday.
A German court approved applications made by the local director of these entities for them to enter into ‘Debtor in Possession’ insolvency proceedings.
This enables the company to continue trading under German law while opportunities to sell or wind up the company are explored. The local director continues to manage the company under the supervision of a court-appointed trustee.
A statement released by Paperlinx on Tuesday read: “The paper merchanting operation in Germany has been trading unprofitably. The decision to file for insolvency proceedings was taken by the local director given that attempts to divest this division over the course of the last few months have been unsuccessful to date.
“The Debtor in Possession proceedings allows the business to continue to trade unrestricted whilst the local director and trustee continue to seek opportunities to divest the operations.”
Paperlinx Germany’s Visual Technology Solutions (VTS) operation (Paperlinx VTS Deutschland GmbH) remains solvent and continues to trade as normal but is now under the direct management and administration of the local German director given the appointment to the German holding company.
Paperlinx Deutschland was Paperlinx’s last outpost in Europe. The company launched a widespread retreat following the collapse of the majority of Paperlinx UK’s operations on 1 April, owing creditors almost £53m, with a pension deficit of £180m.
Paperlinx Benelux and Austria followed soon after.
Paperlinx Ireland and its Spanish businesses were sold to management teams in June, and the Scandinavian operations were sold to Antalis International.
The Czech Republic operations, Ospap was the only remaining trading facility of Paperlinx’s Netherlands holding company, which went into administration in June, leaving just Paperlinx Deutchland remaining in Europe.
Paperlinx’s businesses in Australia, New Zealand and Asia continue to trade as normal.
Separately, former Paperlinx chief executive Andrew Price, who was sacked by the Paperlinx board in February before being named as HH Global chief executive of Asia Pacific in June, has filed a lawsuit against Paperlinx under Australia’s Fair Work Act, alleging he was sacked after refusing to resign.
