The Franck company can not support the draft settlement agreement in the crisis administration procedure in Agrokor, and will use all legal means available to protect their rights as a creditor, the company said in a press release.

Crisis management of the indebted food group Agrokor published on May 25 a draft settlement agreement in the crisis management procedure.

The Franck coffee and tea company, just like the majority of Agrokor’s creditors, was not included in the preparation of the draft and did not have the opportunity to offer remarks to its content, the company said.

Many elements are missing from the published document, which are crucial for defining the status of several creditors and the settlement of their claims, they added.

The draft, among other things, does not contain a proposal for categorisation of creditors for voting, a list of solvent and insolvent companies, the value of property to be transferred to the mirrored dependent companies, previous bilateral agreements with individual creditors (Sberbank, Adris company and Agram company), a plan for the settlement of claims for individual groups of creditors or individual creditors, and the final deadline to fulfil deferred conditions.

“The proposed draft indicates that the crisis administration procedure should last at least ten years since, according to the Emergency Administration Act, it lasts until the settlement plan is implemented,” Franck said.

According to the published draft, the execution of the settlement plan does not start subsequent to a final court ruling, but when all the suspensive conditions are met, or if the emergency administrator waives them in agreement with the temporary creditors’ council.

“As the suspensive conditions are defined too broadly and there is no set deadline for meeting them, it is absolutely unacceptable that the authority of waiver is transferred solely to the crisis administrator or the temporary creditors’ council,” Franck said.

The company added that it was not visible from the draft what business reasons justify the proposal for the management structure of the future Agrokor holding to be located in the Netherlands.

“Given that based on the draft settlement, creditors settle their claims through depositary receipts and convertible bonds in line with Dutch and English law, the proposers obviously want to avoid Croatian legislation and supervision of the execution of the settlement plan which would be conducted by Croatian courts,” Franck believes.

“Franck has warned on several occasions that a small group of creditors has been trying, with the assistance of the emergency administration and consultants, to impose a settlement which not only isn’t fair to all groups of creditors but is contrary to the relevant law and court rulings. As such Franck cannot support this draft settlement,” the press release says.

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