The Ministry of Finance will also speak in the insolvency proceedings with ECM

CITY project on Pankrác Plain

Prague - The Ministry of Finance is likely to weigh in on the insolvency proceedings of the indebted development company ECM Real Estate Investments (ECM). The insolvency judge has asked the office of Miroslav Kalousek to clarify some key accounting terms, the interpretation of which is critical for the future of ECM. This was reported today by ČTK from the insolvency register.
Judge Jiří Rada is currently deciding whether to declare ECM bankrupt or allow the company to reorganize. A condition for granting the reorganization is that the total revenue of the debtor for the last accounting period must be at least 100 million crowns. However, the judge is unclear about the exact meaning of terms like "total revenue" and "net revenue" and the difference between them. He has also requested clarification from the Ministry of Finance regarding expert opinions from consulting firms, whose conclusions do not align.
"The court considers the expression of a public authority in this matter to be more appropriate than possibly appointing an expert, due to possible conflicts of interest or bias arising from the specific composition of the insolvency creditors," stated Judge Rada.
The insolvency proceedings against ECM have been ongoing since spring 2011. Since July, ECM had been in bankruptcy, but the High Court in Prague annulled the bankruptcy decision in October due to procedural errors. A repeated creditors' meeting in November did not decide on a way to resolve the developer's insolvency, and since then, a court ruling has been awaited. There is no time limit for this decision.
Creditors have filed claims amounting to 9.5 billion crowns in the insolvency proceedings against ECM. However, the insolvency administrator Ivo Hala recognized only claims amounting to 2.2 billion crowns.
In addition to ECM's Chairman of the Board and CEO Milan Janků, the company Astin Capital Management also proposed reorganization as a way to resolve debts, representing part of the bondholders. Astin Capital filed the largest claim in the ECM insolvency proceedings, amounting to around three billion crowns. However, insolvency administrator Hala did not recognize Astin Capital's claim.
On the other hand, the bankruptcy of ECM is being advocated by companies such as Glancus Investments from the PPF group, in addition to the insolvency administrator.
ECM is mainly known for its high-rise building projects in Prague on Pankrác. The company was founded in 1991 by entrepreneur Janků.