Initial Situation
The aim of the debtor was to co-develop artificial intelligence (‘AI’) that generates communication solutions with a ‘human touch’. The aim is to achieve the most natural form of communication possible. Specifically, the AI should replace call centres, for example. The customer calls the service number and an AI answers, but it behaves and responds like a human being. This requires a number of things such as recognising the caller’s voice, developing an answer in real time, formulating an answer in real time, continuing the conversation and taking into account what was previously said. Ideally, the AI should also be able to remember the previous conversation and its progress in a follow-up call.
The products are currently under development and are not yet ready for the market. Accordingly, the problem was that development costs of a not inconsiderable amount had to be borne on an ongoing basis without generating cost-covering revenues. Accordingly, the challenge was to constantly attract new investors, which came to a standstill. The debtor finally filed for insolvency and thus came under the protection of the Insolvency Code.
The Insolvency Proceedings
The debtor’s operations were fully maintained and continued during the ongoing insolvency application proceedings with the support of the provisional insolvency administrator. With an initial lack of liquidity, financial resources initially had to be raised to enable the company to continue operations. This was achieved within a few days. On this basis, it was possible to pre-finance the insolvency substitute benefits and to provide the main customers with fulfilment commitments for further deliveries, which were then invoiced and paid.
It soon became clear that a reorganisation ‘on its own’ was not possible. Investors were sought and approached, which proved difficult due to the fact that the products were not yet ready for the market. Nevertheless, it was a promising and viable project, so interest was expressed. Intensive negotiations were conducted, the outcome of which remained open until the end.
The Result
The insolvency administrator succeeded in developing a liquidity plan for a transition scenario with the people involved. On this basis, an investor was sought and found who intended a partial takeover. The insolvency administrator then negotiated and drew up a takeover agreement with the investor, which was finally signed. As a result, the existing software developments and jobs were preserved.
