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Neoset furniture company is offered for sale at auction

08 April 2014 / 11:04:46  GRReporter
3875 reads

After 30 years of continuous operation Neoset furniture company goes bankrupt and website reveals why the court has decided to "pull the plug" of the historic company.

As commented by factors in the market, this is an expected development, as the company had suspended payments in 2012 when it had applied for inclusion in the provisions of Article 99 of the Bankruptcy Act.

Neoset property is offered for sale at auction

The final collapse of the company is preceded by the closure of its factory in 2013, which speeds up the application procedure for the declaration of its bankruptcy.

As set out in the decision on the bankruptcy of Neoset, the furniture company has stopped fulfilling its obligations to its employees, creditors and suppliers, and its factory was confiscated last year.

These facts contribute towards the collapse of the company, forcing 80 of its employees and members of the union of Neoset employees in Vassiliko, Halkida as well as its creditor to request the bankruptcy of the furniture company.

The purpose of this act is for Neoset to declare bankruptcy in order to sell its assets at auction to pay its debts as it has stopped paying its overdue obligations.

Significant debts

In particular, the 80 employees of the union in Halkida have not received their salaries since September 2012, the amount of their outstanding wages for the period September - December 2012 and for January 2013 being 359,100 euro. In addition, the company owes 148,300 euro to another 32 employees. The total estimated amount of the obligations to its employees is one million euro, if not higher, due to overtime payments, overdue benefits, etc.

Moreover, the company owes:

- 6.2 million euro to its creditor (that has requested its bankruptcy)

- 5.5 million euro to suppliers

- 4.6 million euro to third parties, due to the issue of cheques and bonds

- 11.8 million euro to banks

- 1.9 million euro to other creditors

- 472,100 euro to the tax service and

- 3.2 million euro to the National Insurance Institute (IKA)

The company has reached an agreement with the tax service in Athens in terms of its obligations to the state but has not agreed with the National Insurance Institute (IKA), which has submitted a request for the adjustment of its obligations.

It cannot be saved

Athens court has accepted the claim for the declaration of its bankruptcy, considering that the non-payment of the overdue obligations on the part of the company is not due to temporary cash-flow difficulties or to a temporary disturbance of the regularity of payments.

To the contrary, it is due to the fact that the company has become permanently and totally unable to repay its overdue financial obligations, which is why the confidence in it is irreparably undermined, and all payments have been suspended since 17 June 2013, as stated in the decision on the declaration of its bankruptcy.

In addition, this is the reason why the court has rejected the company's request to be included in the provisions of Article 99.

Tags: NeosetFurniture companyBankruptcyCreditors
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