TALLINN - After nearly two years of proceedings, a lower-level Harju county court declared the TKE Group, a Paldiski-based wood processor, bankrupt on Nov. 18.
The TKE Group's trustee in bankruptcy, Toomas Saarma, told the Baltic News Service that although the company had continued operations until the present, its fate would now fall into the hands of the creditors, who will convene for a general meeting on Dec. 13.
Saarma said the value of the TKE Group production complex had been assessed at 77 million kroons (4.9 million euros), while the sum total of the company's liabilities was 179 million kroons.
Although the owner of TKE Group had repeatedly tried to compromise with creditors over debt payments, Saarma said that obligations were still unpaid, which led to the declaration of bankruptcy.
The TKE Group, which launched operations in fall 2001, was forced to stop production the next year, allegedly because of a faulty business plan. At the end of 2002 the court took bankruptcy action against the company. Last December the Harju county court endorsed a compromise under which the debtor promised to pay 80 percent to the creditors by Dec. 31, 2006.
This year the Paldiski wood-processing complex continued operations under the name of Baltic Lumber and Molding. The majority owner of both companies is Nadir Hafiz, who resides in the United States.
The Paldiski facility produces various kinds of wooden slats and parts as well as wood pellets. It employs nearly 200 people.