Dentix in insolvency proceedings creates uncertainty among customers

Lawyou — Wednesday, 24 de february de 2021

Due to its inability to secure a financing agreement, the Dentix has filed for bankruptcy proceedings.
At this very moment, the dental clinic is prepared to take action against KKR, the one hundred and sixty million creditor company that, having refused to fulfill its obligations stipulated in the contract, has left the company, along with its workers, patients and creditors, adrift.

KKR said no to the conversion of its loan into shares.

Last January, Dentix appealed to the contractual obligations that KKR had entered into and asked it to convert its loan into shares. In this way, the investing company will now take control of the dental practice. However, KKR, referring to “accounting divergences,” refused to comply with its commitment.

Faced with this situation, Dentix found itself with vendor financing closed. In an attempt to avoid compulsory bankruptcy, the company availed itself of Article 5 bis of the Insolvency Act just days before the State of Alarm was declared. Thanks to this quick reaction, it would have three months, with an additional month as a grace period, to reach an agreement that would allow it to reach a refinancing agreement with its creditors, which would prevent it from entering into compulsory insolvency proceedings.

The agreement would allow it to reach an agreement with its creditors, which would prevent it from entering into compulsory insolvency proceedings.

The refinancing agreement was not reached

While the exceptional measures due to the progress of the pandemic allowed Dentix to obtain an extension until January 1, 2021, as of today the company has confirmed that it is unable to reach an agreement with its creditors. Dentix has been granted an extension until January 1, 2021.

To make matters worse, its attempt to find investors to save the company from having to file for bankruptcy was also unsuccessful. Months ago, Ángel Lorenzo Muriel, a Dentix director, had set his sights on Advent as an investor. However, the latter rejected the proposal to enter Dentrix to become its shareholder. Later, the dental practice’s executive attempted a similar negotiation with Sherpa, a company that also declined the proposal to enter Dentrix..

The final resolution of Dentix

Facing imminent bankruptcy and with no chance of salvation before the decisive moment, Dentix has decided to file for insolvency proceedings shortly before the legal deadline of four months.

Dentix’s debt and its creditors’ chances

Moving from theory to practice, we find a company that currently finds itself owing two hundred and forty million euros.

The most direct consequence of the bankruptcy is the dismissal of practically one hundred percent of its three thousand four hundred workers, who are distributed in three hundred and fifty clinics throughout the country.

Finally, the clinic would be leaving one hundred thousand patients across Spain without dental treatment. According to ADICAE, such breach would lead directly to the termination of the contracts, a measure that also includes the resolution of the loans obtained whose purpose was to pay for the treatments, as well as the return of the amount already paid if such amount is greater than the cost of treatment received.

Uncertainty is growing among consumers

Because Dentix’s debt has reached an exorbitant amount and creditors will not wait to get their share of it, consumers could be highly affected. Consumer uncertainty is growing.

According to the OCU’s statements, only a minority of those who paid for the full treatment and currently have money owed to them will be able to recover the money due to them. This is explained by the fact that consumers can only collect their money once the last creditor has collected its share.

According to the OCU, in order to recover the money invested in their treatment, it will be necessary for the consumer to be linked to a financing system. In such a case, the claim would be made to the financing company, since doing it directly to Dentix would not yield any positive result. In the event that the user is paying the treatment to a financial institution, FACUA’s recommendation is that they suspend the payment, claiming that the establishment has been closed and, therefore, their obligation to the financial institution has disappeared.

However, the OCU is not giving up and at this very moment is analyzing the possible ways to claim on behalf of consumers.

At LAWYOU we have lawyers with many years of experience who can advise you on this issue. Do not hesitate to contact us to tell us about your case through our email or, if you prefer, you can also call us at the following telephone number: 602 226 895. Or you can leave us your details here.

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