The rescue of the insolvent service company of the Tyrolean community association GemNova failed. At a mayoral conference in Zirl on Monday, a vote was taken against an increase in the contribution, which would be intended to pay off the debt. Now the GemNova is slipping out of business. According to KSV1870, about 700 workers are affected.
On the one hand, not even the required 90 percent of the communities in Zirl were represented. On the other hand, there was no willingness to increase membership fees to reduce the mountain of debt – larger communities in particular were reluctant to do so.
The company, which has a debt of 6.7 million euros, is currently in a judicial restructuring process. Most recently, the Tyrolean state parliament – following a decision by the state government – decided on a subsidy of 1.5 million euros – subject to conditions. This should be superseded with the decision on the Extraordinary Community Day.
“Chapter of GemNova closed to the country”
“The decision was in the hands of the communities as members of the Tyrolean community association. The outcome of the church day is that GemNova goes bankrupt. The state of Tyrol contributed more than it should, because the support of the communities and the future of the employees of GemNova are important to us,” Governor Anton Mattle said in an initial statement.
With the decision, “the GemNova chapter is closed to the country. Because GemNova cannot be saved at any cost. However, the past has caught up with GemNova and makes it almost impossible to continue in an economically sound way,” continues Mattle.
Offer for jobs and social plan
The employees are taken care of together with the social partners. “The state will offer a majority of the employees of Bildungspool Tirol GmbH a job of equal value. We urgently need them for support in the field of education,” the governor emphasizes. For all other employees there will probably be a social plan that will support the country.
The presidency of the community association was tasked with handling the insolvency. This affects 700 employees, 600 of whom in Bildungspool Tirol GmbH alone. Klaus Schaller of KSV1870 noted that the situation here was “particularly dramatic” as it alone employed nearly 600 people.
‘Many civil lawsuits in the coming months’
The credit protection association assumed that the insolvency representative would now hold liable for the management of GemNova, the Tyrolean community association and “the legal entities (Tyrolean communities) close to the Tyrolean community association”. The credit protection association therefore expects a “large number of civil lawsuits in the coming months”.
“In the coming days, we expect bankruptcy proceedings to be filed with the Innsbruck Regional Court for other companies of the GemNova Group,” reported Schaller of KSV1870: “Due to the lack of capital and liquidity, it is unlikely that these companies will continue to operate in the long term.”
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
