Will Midoya customers get their money back? This is what the provisional insolvency administrator says.

Wolfsburg. The DHL truck drives into the yard and the employees pack the goods: At first glance, everything appears to be running as usual at the "Midoya" fashion store in Wolfsburg. However, the business, located on Borsigstrasse, is in financial difficulty. Managing directors Colin Singh and Max Gaas filed for insolvency on July 24.

Provisional insolvency administrator Ulrike Sythes confirms this. She explains that business operations are currently being continued in close consultation with her. All possible restructuring options are being examined. Therefore, the online shop is still open. According to Sythes, orders are being processed and delivered as usual. "And returns are also being processed," Sythes told the newspaper in response to a query.

While goods continue to leave the warehouse, many customers are waiting for their money. Returns have been confirmed, but the promised refunds have reportedly not yet arrived. There are now new comments on the review platform trustpilot.com, with one customer claiming: "In mid-June, I received an email stating that the return had been received and that I would receive my money back within 20 days. This hasn't happened yet."

Markus Hagge, a legal expert at the Lower Saxony Consumer Advice Center, advises against ordering from the fashion store. According to the expert, the Lower Saxony Consumer Advice Center has received "a few" complaints against Midoya. The lawyer cannot provide an exact number.

The Wolfsburg-based company GS Brands GmbH founded "Midoya." The managing directors quickly rose to prominence with the brand. Sales were reportedly in the millions. The company's women's underwear was well received by customers, and the online shop flourished.

But will customers see their money back? According to Ulrike Sythes, there is no blanket equal treatment for all customers.

All claims from customers, suppliers, or other creditors that arose before the opening of insolvency proceedings are referred to as "insolvency claims" under the Insolvency Code. According to Sythes, these include, for example, purchase price refunds for orders that have already been paid for but not delivered, or returns initiated in the past that have not yet been processed.

Customers can register such claims in the insolvency register. This is a legally prescribed procedure: After the proceedings have been opened, every creditor can register their claim with the insolvency administrator. "The administrator will then examine whether and to what extent the claims can be recognized. The benchmark here is the reimbursement guidelines of GS Brands GmbH," says Sythes. In this respect, the managing directors can no longer decide which returns are processed and which are not. The principle of equal treatment applies here within the framework described. "So if a return was not eligible for reimbursement even before the insolvency because it was damaged or dirty, the insolvency administrator will also dispute the claim. Otherwise, the claim will be recorded in the insolvency register," the provisional insolvency administrator told the newspaper in response to an inquiry.

Sythes explains what will happen next: The insolvency proceedings are expected to open on October 1. Creditors can then file their claims in the schedule. "The creditors I know will receive mail with further information after the proceedings open," the lawyer says.

According to Sythes, whether and to what extent creditors with established claims will receive a share of their claims at the end of the proceedings depends on how much assets the administrator can generate in the proceedings. "Only during the course of the proceedings will it become clear whether a payout – the so-called 'share' – is possible and how high this payout might be. In this case, the procedural costs and the liabilities of the estate must be paid in advance," Sythes says.

Her task is to choose the best course of action for the creditors. According to Sythes, restructuring through transfer and an insolvency plan are particularly considered. "Only if restructuring through this route is not possible will I liquidate the company after the proceedings have been opened. Liquidation is usually the economically worst course of action," says Ulrike Sythes.

This article first appeared in the “ Wolfsburger Allgemeine Zeitung ” – a partner in the RedaktionsNetzwerk Deutschland.