Austrian Promoter Files Ch. 11

Richard Hoermann has become the second major Austrian promoter to hit financial troubles within the last year and has filed his Event Service GmbH for the equivalent of Chapter 11 protection.

It was handed in to Vienna’s commercial court October 17th.

The creditors have until November 28 to lodge their claims. Then they’ll be given a further week to consider if they’re prepared to accept Hoermann’s offer of 40 percent of what they’re owed and have it paid over a two-year period.

In Austrian law the company is in "Ausgleich," which works the same way as Chapter 11 except the lawyer appointed to run the company doesn’t continue beyond the date the initial agreement is reached.

The name of, the company Hoermann has traded through for more than a year, isn’t affected as he dropped it when the official company name was changed August 10th.

The commercial court was notified that the company known as Event Service GmbH would be thereafter called Event Service GmbH, with Hoermann stepping down as director and being replaced by Sonja Wellenhofer.

"I think they wanted to ensure they didn’t lose the Web site and they didn’t want that company name to be involved in the bankruptcy hearings," explained Dr. Walter Kainz, the lawyer appointed to handle the case. He declined to comment on the amounts involved.

"I’d hoped to keep it out of court but my lawyers told me the tax office wouldn’t accept the arrangement unless it was made in the court," Hoermann told Pollstar.

He said the tax authority is the only major creditor and Kainz is confident it will accept the offer.

Hoermann said the problems arose when his July 13 show with George Michael bombed, pulling only 9,500 to the 16,000-capacity Vienna Stadthalle. The date had already been downgraded from the 25,000-capacity outdoor site at Danube Island.

It meant he couldn’t pay the VAT bill that was due that month and he turned to his lawyers for a possible solution.

Michael’s 2006 tour of indoor arenas had been a huge success for European promoters, but many of those who looked to cash in on this summer’s follow-ups in larger venues were left with burnt fingers.

As long as Hoermann sticks with the arrangement, he’s legally entitled to continue trading. He has just completed a six-date Austrian and Balkan run for Deep Purple.

He promoted the Graz show himself and worked with Stefan Morosanu of Modus Production for the Romanian show in Bucharest, Petar Petrov of Balkan Entertainment for the Bulgarian show in Sofia, Vlado Ivankovic of Lupa Promotion in Sarajevo (Bosnia) and Split (Croatia), and Marton Brady of Showtime for the Hungarian date in Budapest.

Upcoming shows include Joe Cocker in Serbia’s Belgrade Arena and Austrian dates for STS and Die Fantastischen Vier.

Hoermann’s is the second Austrian company to hit trouble in the last 12 months. Rock & More, which filed for full bankruptcy last autumn (also immediately after a name change), is being chased by official receiver bankruptcy lawyer Dr. Susi Pariasek. She believes the company now trading as Rock & More is legally responsible for some of the debts of the original bankrupt company.

She filed suit in Vienna’s High Court October 31st.