Kirch creditors lining up for first payments
EmptyCOLOGNE, Germany -- Almost five years after the dramatic collapse of German media giant KirchGroup, Kirch's creditors, which include Paramount and Columbia studios, are getting some of their money back.
Michael Jaffe, the insolvency administrator tasked with sorting out the legal morass left behind following KirchMedia's bankruptcy, on Monday said that he has reached agreement with several of the company's former creditors, including Columbia and Paramount.
As part of the agreement, Kirch's creditors will receive a first payment of €300 million ($389 million), Jaffe said in an interview with German weekly Der Spiegel. Kirch's creditors, almost 2,000 in total, are demanding a total of €3.7 billion ($4.8 billion) from the defunct conglomerate.
KirchMedia's bankruptcy in April 2002 was the largest in German post-World War II history. Before it fell, the company, built up by Bavarian mogul Leo Kirch, had the largest library of film and TV rights outside the U.S. studios.
Since the collapse, the company's largest assets -- including German television group ProSiebenSat.1 and pay TV channel Premiere, have been sold off to international investors.
Observers estimate that when Kirch went belly up, the company's bad debts totaled €10 billion ($13 billion). Jaffe declined to comment on the creditors' original demands but said final payments to all creditors were unlikely to be settled before 2013.
In a separate development, Leo Kirch last week demanded €1.4 billion ($1.8 billion) in damages from Deutsche Bank and the bank's former CEO, Rolf Breuer, in connection to the 2002 bankruptcy (HR 1/22).
Kirch has argued that public comments by Breuer contributed to KirchGroup's collapse. Last year, Germany's supreme court agreed with him but did not fix specific damages.