DOMO Chemicals Germany: State orders continued operation
Shutdown of production facilities in Leuna prevented for safety reasons
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The German sites of DOMO Chemicals can continue production at a minimum level for the time being. The state of Saxony-Anhalt has ordered the continued operation of the production facilities in Leuna for safety reasons. The short-term shutdown of production is therefore off the table for the time being.
The background to this is that a safe shutdown of the production facilities in Leuna cannot be implemented in the current weather conditions. In order to avoid danger to people and the environment, the plants must therefore be kept running. At the moment, only the current operators of the plants can avert these dangers. The state has therefore ordered a so-called "substitute measure" to avert the dangers posed by an uncontrolled cessation of operations. The existing obligations of DOMO Caproleuna GmbH, which operates the plants in Leuna, remain unaffected by the implementation of the substitute performance.
"The fact that the state is allowing production to continue on a reduced scale for the time being is very good news," emphasized the court-appointed provisional insolvency administrator Prof. Dr. Lucas F. Flöther from the law firm Flöther & Wissing. "We will have to see what this means for the further course of the insolvency proceedings. In any case, it is clear that we have gained valuable time in which to examine whether and under what conditions a permanent stabilization is possible." It is conceivable, for example, that the company could be taken over by a third party, i.e. a new operator. In this case, the state could withdraw from the substitute performance and the company would possibly have a long-term perspective again.
The three German subsidiaries of the DOMO Chemicals Group filed for insolvency on December 25. The operational situation had deteriorated further in the past week: in order to guarantee the safety of the production processes, energy, certain gases and cooling media such as liquid nitrogen must be constantly supplied. Because the companies have no money to pay the suppliers, there was a threat that supplies would be cut off.
After negotiations with the creditors and the shareholder on urgently needed interim financing failed last Thursday, Economics Minister Sven Schulze once again called all the creditors and financiers involved to the table in Leuna on Monday and urged a solution. The management, the works council, representatives of IGBCE and Infraleuna also took part in the meeting. As the creditors still could not be persuaded to give in in time, the state has now initiated substitute performance.
In the meantime, the employment agency has also agreed to pre-finance the insolvency substitute benefits for around 585 employees so that their wages and salaries can also be paid on time. Their payment via the insolvency substitute benefits is thus secured for the duration of the provisional insolvency proceedings (probably until the end of March). This applies to all three insolvent DOMO companies. Production in Premnitz can also continue.
The insolvency proceedings concern DOMO Chemicals GmbH (Leuna, approx. 35 employees), DOMO Caproleuna GmbH (Leuna, approx. 480 employees) and DOMO Engineering Plastics GmbH (Premnitz, approx. 70 employees).
Note: This article has been translated using a computer system without human intervention. LUMITOS offers these automatic translations to present a wider range of current news. Since this article has been translated with automatic translation, it is possible that it contains errors in vocabulary, syntax or grammar. The original article in German can be found here.
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