CMS advises Moes on acquisition by Hurks applying pre-pack

Over the past weeks CMS guided the transfer of the business activities of construction company Moes to construction company Hurks group through a controlled process of suspension of payments and bankruptcy. During the process most activities, including 75 of its employees, were transferred to Hurks. Moes will now continue its operations under its own name as a subsidiary of Hurks. With a turnover of approximately € 370 million and 800 employees the Hurks group is one of the ten largest construction companies in the Netherlands.

The special feature of this transaction was the introduction of the so-called "pre-pack". Construction sites are often stripped by subcontractors as soon as suspension of payments or bankruptcy are announced and it generally takes weeks before the trustee is able to sell projects to third party contractors. This may result in large indemnities due to the incurred delay which have to be compensated by the banks and / or underwriting institutions. Moreover a sale in bankruptcy will not result in the highest selling price.

In the pre-pack situation, which is not formally part of the Dutch Bankruptcy Act, a pre-trustee is appointed in consultation with the Court prior to the announcement of the bankruptcy. The pre-trustee prepares the sale in close collaboration with the company and the interested buyer. The next step is to apply for a moratorium and subsequently file for bankruptcy. The formal bankruptcy is announced immediately after the sale in which the pre-trustee act as the formal trustee.

To our best knowledge and insight, this is one of the very few examples where the pre-pack was applied successfully to the takeover of a Dutch construction company.

Marc van Zanten and Hein van der Meer led the team consisting of Paulus van den Bos, Wilmy Westerhof, Fleur van Assendelft de Coningh and Floris Pels Rijcken.