Trusteeship

Trusteeships and RIVA – assumption of trustee functions and as an interim / restructuring shareholder for industrial companies and real estate

A frequently used solution in the dispute between creditors on the one hand and crisis-ridden companies and their shareholders on the other hand is the assumption of company shares by neutral third parties who assume fiduciary obligations towards both the shareholders and the creditors. Usually, the trustee has the task of selling the company or assets as part of an investor or M&A process and satisfying creditors and shareholders according to a distribution cascade defined in the trust agreement.

One Square Treuhand (www.onesquare-treuhand.com) takes over the shareholder role on an interim basis, if a temporary change of shareholders is required for a viable solution. We provide this flexibly, depending on the situation through classic trust structures such as the so-called “double sided trusteeship ” or alternative models such as our “RIVA model”.

In the classic double sided trusteeship, One Square Treuhand as interim / restructuring shareholder ensures the existing values, their realisation and fair distribution. Our tasks can be flexibly designed and clearly defined, thus offering a reliable structure to both the shareholder and the debtor. In doing so, we are a temporary shareholder with stringent exit focus based on clearly defined exit scenarios in advance. This can be the sale of the company or a reorganisation and, in the case of success, also enables the transfer of the shares back to the former shareholder. Each solution is individual and tailor-made, from simple trusts to multi-level, tax-optimised structures.

We have extensive experience in taking over trusteeships under both German and Dutch law in the form of the so-called STAK. Following our philosophy of an active entrepreneur, One Square is one of the most entrepreneurial trustees who uses its skillset and strategic thinking to maximise the returns to the creditors and the trustors.

Since 2010, we have developed an alternative to the trusteeship, the so-called RIVA structure, which was used for the first time in the restructuring of Primacom Group, Germany’s fourth largest cable network operator with over €380 million net debt at the time. In the RIVA structure (Rescue Investment Vehicle Alternative), the shares of the company are transferred to a special vehicle whose control is exercised by the managing partners of One Square. In situations where a strong shareholder with a clear restructuring agenda is needed, the role of a new shareholder with all rights and all means is clearly an advantage over the traditional trusteeship. An advantage that translates into significantly improved recoveries for creditors. Since the Primacom precedent case, we have used RIVA in more than 30 cases, both in the area of companies and individual assets such as freight ships.

Due to its high attractiveness also for other stakeholders (customers, employees, suppliers), we have extended the RIVA concept to take over companies in the interest of stakeholders who do not have a debt relationship but nevertheless have a strong, economic interest that requires a new shareholder to take over control. In the automotive supply industry, for example, we have acquired suppliers in the interest of international automotive companies (OEMs) with the aim of securing the supply chain.

In the interest of the owners, we have developed RIVA structures for the takeover of companies that need to be either liquidated or have their business completely reoriented. This is often prompted by relocations and/or closures of unprofitable sites or business units. Shareholders use this structure to avoid implementing the necessary processes themselves, to avoid burdening the existing management and to free up resources for future tasks, to comply with antitrust requirements or to avoid reputational damage.

Our typical clients are:

German and international commercial banks
Hedge funds and special credit funds
Group holding companies
OEMs, such as automotive suppliers, industrial equipment manufacturers

In the implementation of these structures, we offer an interdisciplinary approach with comprehensive expertise for the solution of restructuring tasks – including professional support from legal and operational experts. To this end, we use an established network for legal advice, CROs, restructuring expert opinions, auditing, etc. We manage the operational business as an active shareholder and, if required, also assume interim management functions. We regularly monitor finances and create transparency & control for key stakeholders through regular, standardised reporting and coordinated corporate governance.

Security Trusteeships – Our service for companies and financial creditors.

One Square assists in secured capital markets transactions for a variety of publicly traded and private companies as collateral trustee to secure the assets granted to creditors as collateral with a third party, the trustee. We also act as collateral trustee in complex loan financings, e.g. infrastructure projects such as offshore wind farms.

Our activities initially include the development of the trustee concept, coordination with the parties involved, review and registration of the collateral and preparation of the necessary documentation. After completion of the transaction, regular reporting on the development of the value of collateral follows and – in the worst case – also the liquidation of the collateral in accordance with the trust agreement.

We see ourselves as a full service provider and our team combines legal, business and banking expertise. Our experts know how to handle collateral in a crisis. Through our extensive experience in financial restructuring for various creditor groups, we understand their organisation and way of thinking. With our One Square Real Estate division, we also have extensive experience in the sale of real estate and a very good network of investors.

As a rule, there are no additional costs for the guarantor, since, for example, there are no expenses for commissions and fees from credit institutions.

Our typical clients are:

German and international commercial banks
Bondholders and lenders Companies with group focus on Germany
Issuing houses and agents