Liberty Czestochowa may start bankruptcy proceedings due to financial problems

Polish steelmaker Liberty Czestochowa, a subsidiary of global steelmaker Liberty Steel, may start bankruptcy proceedings due to financial problems. A temporary administration has been introduced at the troubled company, Kallanish reports.

At the same time, Liberty Group said it is considering legal options and remains committed to restarting production.

«We are disappointed with the court’s decision, which is based on a claim by a single small supplier. We are currently considering our legal options, but we remain committed to restarting Liberty Czestochowa,» said a Liberty spokesperson.

Talks of the plate maker entering bankruptcy proceedings have been going on for several weeks now, with the industry also discussing the company’s difficult financial situation.

According to the Polish WNP, in mid-April of this year, one of the creditors filed a lawsuit in Czestochowa court to declare the plant bankrupt. In May, the court appointed a temporary judicial supervisor to the plant. According to the ruling, the plant can operate normally but needs the latter’s consent for some of its actions. This is necessary to protect the plant’s assets in order to possibly satisfy creditors’ claims.

Liberty Częstochowa’s court supervisor found that the management board does not easily submit to the court the documents required for the financial report. This document is supposed to be the key for the court in deciding on the bankruptcy of the steel mill. The court supervisor, who has become the interim commissioner, has 30 days to prepare the financial report.

Representatives of the company, in turn, say that they have not been asked to provide any documents to the court yet, and they also do not know anything about the scheduled date of the hearing.

Liberty Częstochowa has been idle for a long time. In March this year, the company announced its intention to resume production. It was reported that testing of equipment and facilities had begun, as well as negotiations with suppliers of utilities and materials. However, according to the Polish newspaper, production has not yet been restarted.

As a reminder, Liberty Steel plans to sell its troubled Liberty Ostrava steel plant in the Czech Republic, while initiating bankruptcy proceedings.