Hacker attack forces traditional German company into insolvency

Schumag AG, a renowned precision engineering company, has filed for self-administered restructuring at the Aachen District Court. This decision was made against the backdrop of ongoing financial challenges, which were further exacerbated by a recent cyber attack.

The company’s financial difficulties have multiple causes. In addition to a generally challenging competitive environment and declining sales, a cyber attack on September 22, 2024, further aggravated the situation. This led to production outages, delayed revenues, and unexpected cost burdens.

Stefan Lepers, CEO of Schumag AG, explained the situation: “We already had a clear plan for the turnaround, but we had to realize that the previous restructuring plans were no longer sufficient after the cyber attack. The additional burdens caused by the hacker attack have severely disrupted our timeline.”

The nearly two-century-old company has filed for self-administration proceedings at the Aachen District Court. In this special type of insolvency proceeding, the board retains control over business operations but is supervised by an insolvency monitor. In this case, insolvency law expert Dr. Felix Höpker has been appointed as the monitor.

The company’s approximately 450 employees have been informed about the current developments. Business operations will continue, and wages and salaries are secured through insolvency benefits. Lepers assured: “Business operations continue. Moreover, our shareholders have strengthened our position and clearly signaled their continued support for the restructuring.”