As of: 01/17/2022 3:53 p.m
The state of Mecklenburg-Western Pomerania does not have to pay the parent company of the insolvent MV shipyards, Genting Hong Kong, a loan of 78 million euros for the time being. That was decided by the district court of Schwerin on Monday afternoon. The reason given was that it was not clear whether the Genting group was actually in an emergency.
The court denied Genting’s motion for an injunction. The group was not able to adequately demonstrate that without the payment of the 78 million euros it would find itself in an existential emergency, the judge said. In order to obtain an injunction before the decision on the main issue, such an existential emergency must exist. With the conclusion of the urgent procedure, Genting is therefore left empty-handed.
The decision on the main proceedings is still pending
However, the decision on the main issue still has to be awaited, but both sides can still appeal to the Higher Regional Court. It is not yet clear whether Genting will appeal the court decision. A legal representative of the group did not comment on the media immediately after the hearing. At a court hearing last Tuesday, Genting referred to the existence of a valid loan agreement and insisted on payment.
State government sees itself confirmed
The state government said they felt confirmed by the judge’s verdict. Economics Minister Reinhard Meyer and Finance Minister Heiko Geue (both SPD) said it was not the country’s intention to generally refuse to pay out the loan. A possible payout was only planned from 2024. A payment at this point in time would have required that both Genting and the MV shipyards continued to have a positive perspective as a going concern. However, that is not the case. With the insolvency of the MV shipyards, the completion of the cruise ship “Global 1” in Wismar is currently not secured. It is also not apparent that the liquidity emergency of the Genting group of companies would be eliminated with the payment of the loan.
Genting refers to the contract from June 2021
The group, which owns the insolvent MV shipyards, had sued the country for the immediate payment of 78 million euros shortly before Christmas. Genting refers to a contract from last June, in which the country had undertaken to pay the ailing group a loan if it ran into financial difficulties as part of its restructuring. Auditors had predicted a possible financial gap for 2024 – but this gap appeared last December.
Further information
Court had stopped payment to Genting
Genting wanted to enforce the claim to the 78 million euros and was right in an initial decision shortly after Christmas. However, after the country’s objection, the court stopped the payment. The country explained that the situation at Genting had deteriorated significantly and that it was not certain whether the loan could be repaid. The group’s lawyers, on the other hand, refer to collateral. In addition, the country must comply with the applicable treaties and not simply shirk its responsibilities because it does not fit the political line.
Further information
