Bankruptcy is Not the End for Unis Tadiv Employees
Workers at Unis Tadiv in Konjic are getting paid once again thanks to the company’s decision to
file for bankruptcy. The move came about after the factory’s frustrated employees appealed to USAID’s Fostering an Investment and Lender-Friendly Environment (FILE) project for help. Filing the bankruptcy petition allowed the company time to reorganize and negotiate agreements with its creditors. Now, the company is earning 200,000 Euros monthly by exporting machine tools and fasteners to the European Union. It is the first reorganization under BiH’s new bankruptcy laws passed in 2003.
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| Workers receive salaries for first time in 3 years |
“71% of all state-owned companies are insolvent,” says USAID’s Economic Restructuring Office chief John Seong. “Bankruptcy offers them a chance to transfer assets to a new investor free and clear of the unmanageable debt load, while resolving creditor claims in a fair and transparent manner.”
After Unis Tadiv’s bankruptcy petition was submitted all 160 workers received their first paychecks in three years. They continued to get paid, including all social contributions, during the entire 11-month bankruptcy and reorganization process. Also, Unis Tadiv’s assets of 3.5 million KM were put back into productive use and production increased by 30% above pre-bankruptcy levels.
Under the reorganization plan reached in October 2005, Unis Tadiv’s workers own 67% of the company. The remaining 33% was transferred to the company’s major creditor in satisfaction of debt, leaving the company completely privatized despite earlier failed attempts to do so. There are currently 335 cases filed under the new law.
Surprisingly, trade unions, who were among the most vocal critics of bankruptcy, have become major filers of cases in the courts. With workers’ salaries on the line, they have a strong interest in restarting production.
“Many BiH citizens tend to view bankruptcy as the end of a process. In reality it’s an opportunity for a fresh start,” says Seong.
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