MPS declares bankruptcy

Four Dutch entities in the MPS Group were declared bankrupt via the Dutch court system.

MPS Holding, MPS Systems, MPS Service & Commissioning and MPS Supply Chain have been declared bankrupt in the Netherlands as of October 28. There are currently no official court reports, but those affected can get official updates via the Dutch Central Insolvency Register.

MPS has shared that all production for orders and deliveries placed before the bankruptcy notice, including the shipping of new equipment, will be suspended. However, existing customers can still order spare parts, tooling, and consumables during the process.

Eric Looijen, from Stellicher Advocaten legal services, has been appointed as the trustee for the companies, and any client contact regarding claims must go through him and the law firm. The District Court of Gelderland ordered this. For technical issues, Looijen will contact the MPS management team, but the trustee must confirm any decision.

Any outstanding invoices the companies owe are not guaranteed to be paid, and creditors must file a claim with the bankruptcy court. However, this will depend on how much money is available after the assets are liquidated or if a buyer comes forward, which MPS shared there are 'several' interested buyers.

MPS said in a statement: 'At this moment, all operational activities – including production, deliveries and services are temporarily suspended. The curator is investigating whether certain activities can be continued or transferred to a third party.'

There will be a two-month 'cooling off period' during which creditors are unable to file claims or attempt to claim any goods from the group of bankrupt companies. A cooling-off period is standard in the Netherlands. It is used for the appointed trustee to assess the entity's debt load relative to the value of its accumulated assets, and to determine whether the company can be restructured to keep it afloat.

Interestingly, a Dutch court can set a maximum cooling-off period of two months. 

MPS has published an FAQ on its website to address customer concerns. 

The company also shared that an investor pulled out at the last minute, leaving the company no choice but to declare bankruptcy despite making a turnover of more than 30M Euros (34.5M USD) in the 2024-25 financial year, citing the war in Ukraine as a major disruptor to the business costing around 20 percent of its turnover as the cost of energy exploded after Russia invaded Ukraine. 

The company also claims that trade rates between the European Union and the US, following the implementation of US president Donald Trump's tariffs, played a role in the bankruptcy. 

As a result, up to 100 employees at the Arnheim location are at risk of losing their jobs. 

Despite MPS stating that all its current operations are suspended, it has implored those who still owe the company to continue paying their invoices, while also saying that deposits for outstanding orders are non-refundable, even though all orders are suspended. 'The Service Department will check with the trustee whether orders can be confirmed. You will be notified about the outcome,' MPS said.

Ongoing invoices will also have to be paid to an alternative bank account under the trustee's control.

Additionally, the company is not held to account for any compensation owed; if a customer feels they are due compensation, a claim must be filed with the trustee, once again, after the two-month cooling-off period.

Machines that should still be under warranty will no longer be, as the bankruptcy voids MPS's warranty obligations. Claims regarding warranties will have to be filed with the trustee. 

This news will come as a shock to the industry, as MPS has been a long-standing business in the sector and could remain so for many years in the future if a suitable investor appears.

According to the FAQ, the trustee expects a 'going-concern sale of assets' to go ahead. This means that if a buyer comes forward, they must continue the same operations as the seller and, as a result, fulfil all contracts must be fulfilled by the new owner.

However, MPS said it 'will be up to the new owner', on whether the company continues to work with current clients.

MPS said: 'The trustee understands that this situation may affect business relationships.  

'However, matters of reputation and communication with your customers fall outside the trustee's responsibility. You may wish to inform your partners that the bankruptcy concerns MPS and not your own operations.'

Lastly, MPS added that there are 'several interested parties' in buying the entities and customers can expect to be updated 'as material developments occur', which could be up to one month.

MPS did not respond to Labels & Labeling’s request for comment.