Two Märklin employees have been fired in the wake of the company's insolvency and owner Kingsbridge Capital is refuting allegations it's being investigated by a public prosecutor regarding its role in the company's financial demise.
According to the German business daily Handelsblatt, insolvency trustee Michael Pluta confirmed Karlheinz Menrad, the head of Märklin's Hungarian subsidiary, has been dismissed. Reportedly, Menrad had transferred more than $127,000 to Adler Toy, a holding company owned by the Hardt Group - connected to Kingsbridge - just prior to the declaration of insolvency. Menrad is a managing director of Adler Toy.
Only the German portion of Märklin has declared insolvency.
Also dismissed was Hans Reyher, the company's head of bookkeeping at the Goeppingen, Germany headquarters. Both men were longtime employees.
The firings come amidst reports in the German media of an investigation into the fees paid by Märklin to consultants since Kingsbridge bought it in 1996. According to reports, Pluta said the company might not be insolvent if it hadn't paid the approximately $50.1 million in fees. Kingsbridge has refuted Pluta's claim and might pursue legal action against the administrator.
Authorities in the state of Baden-Wurttemberg, where Goeppingen is located, are also reportedly looking into allegations that Kingsbridge and Goldman Sachs lied about the financial situation of Märklin to get bank financing and that "hush money" was paid to some employees.
One direct effect of the insolvency has been the cutting back of the number of starter sets offered by Märklin GmbH. Dealers were notified in late February the previous list had undergone "a critical analysis" and that 13 sets had been cut, along with one new item.
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