Photon Holding said on Tuesday that the assets and operations of its subsidiaries, including Photon Publishing and PV construction division Photon Power AG, are not affected by preliminary insolvency proceedings begun last week.
Photon said the Aachen District Court opened preliminary insolvency proceedings for the company due to a tax obligation to the tax office of Aachen. While the group stressed that it did not dispute the tax obligation, it said it had submitted tax refund claims approximately equal to the amount owed but which have yet to be validated.
Photon added that its management did not request the opening of proceedings and that it believed the move was "unnecessary."
According to Berlin-based insolvency attorney Jan Heckmann of Anwaltskanzlei Heckmann, the administrator will determine during the provisional insolvency proceedings whether business can be continued or whether the company is liquidated.
In Photon’s case, it remains to be seen how the preliminary insolvency proceedings play out. However, Heckman said that if Photon’s preliminary insolvency proceedings indeed resulted from the fact that tax refund claims were not validated, the number of creditors is likely just one and therefore manageable, which in turn makes a rescue of the company possible.
Heckmann added that while it’s theoretically possible that a company continues normal operations following the opening of court ordered preliminary insolvency proceedings, the firm’s business partners run a high risk of foregoing payment for continued services. Indeed, Heckmann stressed that firms that continue to do business with an insolvent company should only do so under expert counsel and with the inclusion of the preliminary insolvency administrator.
The operational business of an insolvent company very much depends on whether it has enough assets to carry on normal trading something which the preliminary insolvency administrator would have to review, Heckmann said.
Any creditors that are owed payment by an insolvent company would be paid from its assets during the actual insolvency proceedings that follow preliminary insolvency proceedings.
Photon Holding’s other subsidiaries include product test lab Photon Laboratory GmbH as well as a 60% stake in consulting group Photon Consulting LLC.