"Arădeanca" goes bankrupt

"Arădeanca" Arad, the biggest doll maker in Romania, which had a 60% market share, entered bankruptcy after the reorganization plan was rejected by the creditors. According to Ioan Biriş, the representative of Activ Grup IPURL, which was appointed as a temporary liquidator, the creditors are not required to justify their vote against the reorganization plan.

"The reorganization plan has not been approved by the creditors. They've taken their vote but we can't explain why they have voted one way or another. Thus, the company has entered bankruptcy, which means that the procedure applicable in such cases will be followed, an inventory of the assets will be made, some will be reassessed and then their sale will proceed, together with the collection of the debts", said Ioan Biriş.

Sources from among the workers are saying that most likely, the creditors have been led to vote in favor of the bankruptcy because 50% of the company's machinery is old, the median age of the employees is high, and domestic sales are seasonal, as there is no outlook for long or medium term sales.

The company's decline has begun at the end of 2011, when it was hit with a sequester of approximately 5 million de lei on its building and movable assets. The company's accounts had also been garnished by the Arad Tax Administration for an amount of over 428,000 lei the company owed to the state.

Last year, on March 31st, the company owed 320,997 to the state budget, 329,108 lei to the social security budget, 130,802 to the social security budget and 12,886 to the unemployment security budget.

"The moment the company declared itself insolvent, the tax administration was no longer able to intervene in order to collect the amounts it was owed. Now all the procedures are done by the liquidator", said Călin Arusti, spokesperson to the General Department of Public Finances of Arad.

A few days ago, the court of Arad declared Arădeanca SA bankrupt. The next deadline for the continuation of the procedure has been set for May 16th.

Last year, in May, the management of Arădeanca SA has asked for the beginning of the insolvency procedure because it no longer had the cash reserves it needed for the payment of the debts, mostly towards its suppliers, banks and state institutions, amounting to 1.45 million lei, according to a report sent to the Bucharest Stock Exchange. The building of the factory had also been mortgaged by BRD in exchange for a credit line of approximately 270,000 lei. The Romanian National Securities Commission has a claim of 7.646 lei, S.I.F. Banat-Crisana S.A-is owed 860 lei, and the Central Depository is owed approximately 3,000 de lei. These three claims are unsecured.

A choice has been made for beginning the reorganization procedure according to a restructuring plan. The court has admitted the request and has decided the beginning of the general insolvency procedure, by appointing as an interim liquidator SC Activ Grup IPURL, but the creditors have not agreed to the reorganization plan.

Arădeanca still has 35 employees and it makes toys for the domestic and foreign market in an outsourcing system. After more than 60 years of activity, the factory tried to keep itself on the market for intelligent dolls, (which cry, walk and have hair that grows), but it has also made personalized toy for Nadia Comaneci and Oana Zăvoranu.

The factory also makes gardening accessories, as well as cups and medals.

According to data from the Trade Registry, Arădeanca SA is owned by SIF Banat-Crişana (39.6%), three shareholders from the Association of employees (40%) and 1,203 individuals which have received shares in the company as part of the mass privatization program.