Noerr advises US investor MGG on takeover of Spark Networks in German StaRUG proceedings

Noerr has advised MGG Investment Group (“MGG”) on its acquisition of all shares in Spark Networks SE in restructuring proceedings governed by the German Act on the Stabilisation and Restructuring Framework for Companies (Gesetz über den Stabilisierungs- und Restrukturierungsrahmen für Unternehmen, StaRUG) (the “Restructuring Framework Act”). MGG will be taking over Spark Networks, a leading international operator of dating platforms. Various investment funds managed by MGG were already principal creditors of Spark and will now be taking over the company in its entirety. The old shareholders will exit the company without any compensation.

The creditors involved approved the restructuring plan in December 2023, outvoting the majority of dissenting shareholders via a “cross-class cramdown”. The restructuring plan contains arrangements for considerably reducing the company’s debts and completely writing down its capital to zero combined with a subsequent takeover of all shares by MGG. In return, MGG will forgive part of the loans granted by it and at the same time will ensure that the company receives new, sustainable financing. The underlying restructuring plan was confirmed by the competent restructuring court at Berlin-Charlottenburg Local Court (Amtsgericht Berlin-Charlottenburg) on 4 January 2024.

Since Spark has activities in the US, an application for recognition of proceedings under the German Restructuring Framework Act in the United States under Chapter 15 of the U.S. Bankruptcy Code was submitted in parallel and successfully approved. These also constitute the first known proceedings under the Restructuring Framework Act to be recognised in the USA.

The Noerr team advised MGG jointly together with US lawyers from Proskauer Rose.

Advisors to MGG Investment Group: Noerr

Thomas Hoffmann (partner, Restructuring, Berlin/Frankfurt, lead), Laurenz Wieneke (partner, Capital Markets, Frankfurt), Nicholas R. Palenker (senior associate, Restructuring, Berlin), Marcus Braun (associate, Restructuring, Berlin), Julian Schulze De la Cruz (partner), Alexander Schilling (partner), Nikolai Warneke (partner, all Finance, Frankfurt), Hans-Christian Kirchner (partner, Litigation, Berlin), Andre Happel (partner, Tax, Frankfurt)

 

Advisors on US law: Proskauer Rose LLP

Fred Ragucci; Yuval Tal; David Hillman; Jae Kim

Advisors to Spark Networks SE: Brinkmann & Partner; Jones Day; Kirkland & Ellis

Restructuring officer: Philipp Hackländer (White & Case)

Advisors to various shareholder groups: Willkie Farr & Gallagher LLP; Schultze & Braun; WTS Legal; Allen & Overy LLP