Insolvency administrator takes the helm at Beluga

The future of Germany's Beluga Shipping Group is now largely in the hands of insolvency attorney Edgar Grönda of the law firm Schultze & Braun. Beluga Chartering GmbH filed for insolvency in the Bremen District Court on Wednesday, while Beluga Shipping GmbH followed suit yesterday. Mr. Grönda has been appointed Insolvency Administrator in both cases

The insolvency filings followed the March 8 revelation that Beluga Founder and former CEO Niels Stolberg and other executives are being investigated by the Bremen Public Prosecutor on charges, essentially, of cooking the books. The investigation came after Oaktree Capital, which has a 49 percent stake in Beluga, reported "irregularities" to the prosecutor.

Oaktree  says it discovered the irregularities when it performed due diligence on the company in response to a February 2011 request for further liquidity. It says that, in response to its discoveries, Beluga suspended a number of senior managers, pending further investigations.

In a statement issued in response to news of the investigation, Oaktree said it had "convened meetings with various significant stakeholders to facilitate a longer-term restructuring which will enable Beluga, already the market leader, to become more efficient and to take advantage of current market conditions. Throughout the restructuring process, the group will continue to operate normally with full scale operations and serve its customers as it has in the past."

Whether the restructuring will now follow the course described by Oaktree is now very much up to Mr. Grönda - whose publications include "Companies in Crisis – The Lawyer as Emergency Doctor."

March 18, 2011