Cleary Gottlieb represented Belgian multi-national Agfa-Gevaert in obtaining and entering into a global settlement agreement with the AgfaPhoto group. The agreement provides for a final settlement of mutual claims arising from commercial relationships between the parties following the transfer of Agfa-Gevaert’s former Italian consumer imaging business from the Italian Agfa-Gevaert subsidiary, Agfa Gevaert S.p.A. to the Italian AgfaPhoto subsidiary, AgfaPhoto Italy S.r.l., on November 1, 2004.
The transfer of the Italian consumer imaging business was part of the November 2004 sale by Agfa-Gevaert of its worldwide consumer imaging business to the AgfaPhoto group, an investor group consisting of private investors, private-equity funds and incumbent members of the Agfa-Gevaert’s management team.
AgfaPhoto Italy had to terminate its consumer imaging activities and start a liquidation procedure in November 2005, including employee layoffs, because of the insolvency of its German parent company, AgfaPhoto GmbH. The parent company was also the supplier of the consumer imaging products to be commercialized in Italy.
Because of the complex commercial relationships of the Agfa-Gevaert and AgfaPhoto groups following the transfer of the Italian consumer imaging business, both groups were interested in finding a commercial solution under which AgfaPhoto Italy could avoid bankruptcy and the parties could protect the value vested in the Italian consumer imaging business.
The settlement agreement will allow AgfaPhoto Italy to carry out an orderly liquidation and prevent a large proportion of claims by its customers and employees following the termination of its consumer imaging activities. Both parties will benefit from the maximized monetization of AgfaPhoto Italy’s assets.
The value of the settlement agreement exceeds €10 million and is of great importance for the Agfa-Gevaert group.