Hospitality industry - Arcona hotel group ends insolvency - creditors agree
Seven months after filing for insolvency, the Arcona hotel group, which operates in several German states, can breathe a sigh of relief. The creditors approved the insolvency plans of the affected hotel operating companies in all proceedings without objection, as the company announced in Rostock on Thursday. "We are glad that our partners have remained loyal to us even in this difficult phase and have allowed us to continue the path of self-administration," said Alexander Winter, managing director of arcona Hotels & Resorts. The Rostock District Court had invited creditors to a creditors' meeting on Wednesday.
Arcona operates four- and five-star hotels in Weimar (Thuringia), on Sylt (Schleswig-Holstein), and several hotels on Rügen and Usedom. Locations also include Austria (Kitzbühel) and Mallorca. For all German businesses, the company filed for insolvency in self-administration. In this insolvency variant, management retains control.
Reduced Portfolio
In the restructuring phase, Arcona separated from a total of three businesses on Rügen (arcona Living First Sellin), in Thuringia (Romantik Hotel Auf der Wartburg), and Austria (Triforêt). This significant contribution has been made to secure the economic performance of the company again, according to Winter. The now accepted plans provide for payments to creditors, which also include shares in future profits. This brings creditors a much clearer satisfaction than the liquidation of the company.
The hotel group, which operates the Barefoot Hotel (Till Schweiger's brand) on Mallorca, reduced its portfolio to eight businesses according to its own statements. There are still more than 300 employees working for the company.
The company, founded in 2008, filed for insolvency in November of the previous year, among other reasons, due to investment decisions made during the ongoing pandemic and the rapid expansion of the company on unforeseeable external factors. This included, for example, the war in Ukraine, energy supply bottlenecks, and high inflation. The resulting general purchasing hesitation of guests led to significant sales losses, particularly in the hotels' catering services.
- Despite facing insolvency, Arcona's partners in the hotel industry remained loyal, allowing the company to continue self-administration in Rostock.
- The hotel group, known for operating luxury properties in Weimar, Sylt, and various locations in Rügen and Usedom, had filed for insolvency in self-administration across all German states.
- Following the creditors' meeting at the Rostock District Court, the insolvency plans were approved without objection, providing relief to Arcona after seven months.
- In the process of restructuring, Arcona separated from three businesses in Rügen, Thuringia, and Austria, significantly contributing to securing the company's financial performance.
- Alexander Winter, managing director of arcona Hotels & Resorts, expressed gratitude to the creditors, indicating their loyalty was crucial during this challenging phase.
- With the approval of the insolvency plans, creditors will receive payments and shares in future profits, providing a clearer satisfaction than if the company were liquidated.
- Arcona, which operates the Barefoot Hotel on Mallorca, reduced its portfolio to eight businesses, maintaining more than 300 employees within the organization.
- The insolvency filing in November of the previous year was attributed to investment decisions and the rapid expansion of the company during the pandemic, as well as external factors such as the war in Ukraine, energy supply challenges, and high inflation.
