J.A. Jones Distancing Itself From Bankrupt German Parent
Failing to win support from creditors for a restructuring plan, Holzmann filed for insolvency March 21 at a Frankfurt court. An insolvency team quickly moved in, led by a court-appointed attorney.
Holzmann's downfall emanates from the 1999 discovery of huge hidden losses, mainly in European real estate operations and unsuccessful investments in eastern Germany after the country's reunification. The company moved briefly under court protection until German Chancellor Gerhard Schroeder arranged a bank-backed bailout. The company had been seeking a merger or acquisition since December, but a deal could not be brokered in time. Holzmann's debt to some 20 banks remains at around $1.3 billion, with the firm set to report another loss for 2001.