Dentons has advised automotive parts manufacturer Motorpal on the successful implementation of a pre-pack reorganization. After successful negotiations, approval and implementation of the reorganization plan, the company emerged from insolvency. As a result, the company will save more than 1200 jobs in an economically disadvantaged region of the Czech Republic. The Motorpal case is the first successful pre-pack reorganization in the Czech Republic to obtain the strong support of senior secured lenders.

"We are happy about the outcome of the case. It's a great success for both Motorpal and its creditors, and for the Czech economy. Having represented Motorpal throughout this long journey, we believe the company has great potential and the restructuring has added significant impetus for further development," said partner Jiri Tomola, Head of Dentons' Restructuring, Insolvency and Bankruptcy practice in Prague. "The case is also important from a legal perspective. It will serve as a precedent and create more space for the use of pre-packed reorganization in practice."

Motorpal filed its insolvency petition together with a reorganization plan with the Regional Court in Brno on 15 January 2016. Despite the fact that the pre-pack reorganization plan had the overwhelming support of the creditors, the regional court in Brno rejected it based on formalistic grounds. Dentons successfully represented the client at the Constitutional Court of the Czech Republic, claiming that the Regional Court's rejection of the plan violated the client's right to a fair trial. The Constitutional Court found in favor of Motorpal - overturning the Regional Court's decision and allowing the company to resubmit its reorganization plan. The plan was approved by the majority of secured and unsecured creditors and obtained approval from the Regional Court in September 2016.

On February 21, 2017 the Regional Court in Brno issued a resolution stating that Motorpal had fulfilled its reorganization plan and was out of insolvency. Due to the complexity of this restructuring deal, Dentons brought together a cross-practice team including Restructuring, Insolvency and Bankruptcy, Corporate, Banking and Finance, and Litigation and Dispute Resolution. The team was led by partner Jiri Tomola, and included counsel Juraj Alexander (who left the firm during the transaction), associates Vaclav Zalud, Martin Fronek, and junior associates Vojtech Novak, Katarina Kucharovicova and Jan Kralicek.