A Czech court has frozen Liberty Galați’s assets and halted its restructuring

The restructuring process of the Romanian steel mill Liberty Galați has come under significant pressure due to new legal complications. The Regional Court in Ostrava (Czech Republic) has ruled to impose temporary restrictions on the company’s key assets. This was reported by SteelOrbis.

This procedure resulted from a lawsuit filed by Šimon Peták, the insolvency administrator for the Czech Liberty Ostrava plant.

The dispute centers on a loan agreement signed in October 2023, under which Liberty Galați’s debt to Liberty Ostrava exceeds €40 million. In April 2024, the Romanian side paid only interest, amounting to less than 2% of the total debt. The existence of this debt is also officially recognized in the restructuring plan submitted by Liberty Galați to the Romanian authorities.

Since the agreement provides for the exclusive jurisdiction of the courts of Ostrava, the Czech court found the claims to be well-founded and applied a provisional measure to protect the creditors’ rights. The restrictions apply to specific assets: land plots, buildings, and key production units. Any transfer of these assets contrary to the court’s decision may result in legal liability and be subject to appeal.

Representatives of CITR, the administrator of Liberty Galați’s composition proceedings, are trying to reassure the market:

• they assert that the Czech court’s decision has no direct impact on the preventive restructuring proceedings in Romania;
• the interim measure is being appealed and, in their view, does not halt the bidding process;
• the final method of recovery will be determined by a Romanian court within the framework of the preventive restructuring proceedings.

The situation with the Czech court is increasing uncertainty regarding the plant’s future and its ability to attract a strategic investor to stabilize operations

As reported by GMK Center, a new restructuring plan for the Liberty Galați steel plant has been submitted to the court in Galați (Romania). It was submitted by two restructuring administrators—Euro Insol and the CITR Galași branch. The document’s key proposal is to sell the enterprise through an open auction. The initial value of the asset is set at €444 million. The second auction for the sale of Liberty Galați is scheduled for June 17, 2026.