ELS Europäische LizenzierungsSysteme GmbH to reorganise itself under self-administration

The retention of workplaces and business activities are the primary targets of the reorganisation procedure

On 15.03.2018, ELS Europäische LizenzierungsSysteme GmbH applied for reorganisation under self-administration. On 19.03.2018, the responsible County Court of Bonn ordered temporary guardianship of the company’s assets. Lawyer Rüdiger Weiß from the law office WallnerWeiß, as reorganisation specialist, was appointed as the temporary guardian. This law office is considered by national surveys to be one of the most successful law offices for company restorations under self-administration.

ELS, founded in the year 2008 as a complete provider of solutions for implementation of the Packaging Ordinance, has been active on the market since 2015 as a packaging waste management company. As a full service provider for packaging licensing, it offers its customers comprehensive and legally watertight consultation, licensing and documentation on all European markets with its own dual system ELS Dual for the legally-compliant fulfilment of the respective laws and ordinances.

According to the Packaging Ordinance, companies which distribute packaging are obligated to participate in a comprehensive system for the recycling of this packaging. These systems are also designated as dual systems because they represent additional recycling systems operated in parallel to the municipal disposal of waste. There are ten nationwide approved dual systems. These companies close contracts with municipal waste management companies for the collection, sorting and recycling of the packaging. The manufacturers of goods pay license fees to the respective dual system for each piece of sales packaging, and the dual system then in turn finances the yellow containers and sacks as well as the collection, sorting and recycling of the valuable substances from these fees.

Managing Director Sascha Schuh sees the failure of the market for packaging recycling in Germany as a significant reason for the crisis: “From the start, there were substantial financial and structural problems in the collection and recycling of sales packaging. Because in Germany only the dual systems, and not the distributors, are subject to stringent controls, in particular freeloaders misusing the system have contributed towards enormous liquidity problems within the dual systems. These companies put unlicensed packaging onto the market, for the disposal of which no payments have been made. A concept in which the expenses are higher than the income simply cannot work. In addition, the extremely volatile prices for secondary raw materials, fluctuating and lost sales markets as well as consistently-increasing prices for recycling services have also played a role”, says Schuh.

ELS initiated a merger and acquisition process in November 2017, which suffered delays due to its complexity. Accordingly, in order to ensure the viability of the reorganisation success, the Management was forced to apply for the protection of the compulsory rehabilitation under self-administration. 

ELS Europäische LizenzierungsSysteme GmbH is a 100% subsidiary of ASCON Holding GmbH. Neither the subsidiaries nor ASCON Holding are affected by the compulsory rehabilitation, and are able to continue their business operations without interruptions or limitations.   

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Angela Emons

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