Advisors collect 18 million from Imtech bankruptcy

28 September 2015 3 min. read

Last month engineering firm Imtech collapsed, sparking the largest bankruptcy ever in the Netherlands, and also one of the largest recent bankruptcies in the European engineering services industry. For several external advisors, the bankruptcy, however harsh it may sound, unleashed a gold mine, with external lawyers and consultants raking in more than €18 million in fees in the space of just 5 weeks.

On 13 August 2015 Royal Imtech was declared bankrupt. The company succumbed to severe liquidity problems, with an attempt to re-launch and save the company failing. Following the large bankruptcy – Imtech had about 22,000 employees, of which 80% were based outside its home base – the majority of the concern was sold off in pieces to interested parties. Also Imtech UK & Ireland (~2,600 employees) was declared bankrupt, although the administrators quickly managed to sell the business to investment firm Endless.


An analysis of the first bankruptcy report by the administrators reveals that in the run-up to its collapse, between 1 July and 5 August, Imtech spent around €18 million on external advisors, including legal advisors from law firms De Brauw Blackstone Westbroek, Clifford Chance and Freshfields Bruckhaus Deringer. De Brauw Blackstone Westbroek were Imtech’s home attorney, Clifford Chance represented the nine largest banks backing the group, while Freshfields Bruckhaus Deringer provided a range of legal advisory services. Management consultants were also involved, although they took home a significantly smaller portion of the pie.

According to the report, as of 8 August, around 120 external advisors were working for the company in its bid to save the company and re-launch. The fees for the two administrators (Jeroen Princen and Paul Peters) were in comparison marginal – €45,000 apiece.

Lack of information
In the bankruptcy report Princen and Peters are critical about the actions of Imtech and the advisors who worked for them. They argue that a lack of supplied information prevented them from adequately performing their duty, with Imtech and the consultants not providing all the relevant information required for the process. During the period that the administrators were involved with the company, they had difficulty, in their opinion, accessing information. “During the administrators we hoped to get a better grip on the process. This did not happen,” write the administrators. “Imtech and De Brauw out of themselves provided us hardly any information.”


The administrators are also critical of the role played by the banks in bankruptcy. The largest part of Imtech was owned by several banks, but some of them froze bank accounts held by the company before the bankruptcy was even declared. An uncommon move, which according to Princen made management of the operating company “more difficult”, adding that he thinks the choice of banks was “very much motivated by self-interest.” In a reaction to the accusations, a number of banks have via their spokespersons denied the claims.