Embattled Lilium Aerospace faces a race against time to secure funding required to maintain its short-lived existence, with the firm poised to file for insolvency on 14 February if the promised payment has not arrived.
In an email circulated to some staff on 13 February and seen by FlightGlobal, a Lilium manager said they still had “no positive communication” on the transfer of funds.
Interim managing director Severin Tatarczyk has “made contact with the judge and has confirmed that we will file for insolvency tomorrow lunchtime, unless a solution is found tomorrow AM”, it says.
Although the message says “some hope remains” it acknowledges that “our time is running out”.
Lilium Aerospace did not respond to a request for comment by the time of publication.
Should the firm fall into insolvency, it would likely extinguish any prospect of the Lilium Jet seeing the light of day – and likely trigger a raft of litigation as lawyers rake over the ashes to discover who owns what.
Lilium Aerospace was formed last year to acquire the assets and operations of Lilium GmbH and Lilium eAircraft, German businesses that were on the verge of closure after beginning a self-administration insolvency process in late October. It is important to note that the firms themselves were not being purchased.
Both were subsidiaries of Dutch-registered and US-listed Lilium NV, which is itself now being wound-up.
Should it transpire that the administrators running the two business have received no money from the buyers then a legal fight over ownership of the assets would almost certainly follow.
Lilium Aerospace was to be funded by a consortium of investors who were to inject €200 million ($208 million) into the business to continue work on the Lilium Jet.
But for reasons that are still unclear, the transfer of the money has not taken place, despite promises from the investors.
Marian Bocek, the chief executive of InoBat, a Slovakian battery maker, whose DTM Investment firm is contributing a large part of the total, addressed staff on an all-hands call on 7 February and pledged to resolve the payment issue.
Staff who signed up with Lilium Aerospace - already waiting for their overdue January wages - are likely to be left out of pocket and potentially stuck in limbo. Their contracts are with Lilium Aerospace, but it is unclear what German insolvency protections would kick in.
In the meantime, a legal fight seems to be brewing over the way 200 employees at the two subsidiaries were made redundant in mid-December.
Trade union IG Metall says its lawyers are investigating whether the correct redundancy process was followed, in line with German employment law.
In particular, it questions the way employees were selected for redundancy. If two workers are otherwise equally qualified, German law gives preferential status to those who have dependents or other social obligations.
But IG Metall says it has seen multiple instances where it believes this rule was not adhered to.
In communications with the union, lawyers for the companies insist that the correct procedures were followed by a specialist agency that was contracted to carry out the selection process.
But even if the rules were applied correctly, those employees were not immediately cut from the payroll. Depending on their tenure with the business, redundancy triggered paid notice periods of one month and upwards.
Staff laid off in the early December redundancy round are still to receive their pay, IG Metall says.
“Going two months without pay is a real social risk,” says IG Metall official Falko Blumenthal.
The union is now representing up to 100 former Lilium GmbH and Lilium eAircraft staff in multiple employment claims for unlawful termination of contracts or for wages owed.
Because of a reversed burden of proof for German unfair dismissal claims, the companies must prove they acted lawfully.
Unless those claims are settled out of court – mediation is due to take place during the last week of February – they will be heard initially in a Munich court, moving to a state-level court if there is an appeal.
The situation is complicated by fact that at the time the redundancies were made, both companies were in self-administration – run by their existing management and two external insolvency and restructuring experts from law firm Goerg.
Additionally, IG Metall continues to investigate links between the two companies and buyer Lilium Aerospace, and the timing of the transaction.
According to documents from Germany’s federal Arbeitsagentur agency – which must be notified of lay-offs involving more than 15 people – the Lilium subsidiaries applied for an accelerated round of redundancies on 16 December, followed by a second filing 23 December when they sought to cull the remaining staff as closure loomed.
MUC signed its agreement to acquire the assets and operations that same day, Lilium’s stock market filings disclose.
IG Metall’s lawyers are also attempting to establish whether Lilium Aerospace constitutes a “direct legal successor to the insolvent corporations” and is therefore liable for debts or breaches of employment legislation carried out by Lilium GmbH and Lilium eAircraft GmbH.
As there was no works council in place, IG Metall’s ability to defend workers’ interests has been limited, says Blumenthal.
“But Lilium’s actions have been an excellent advert for union representation,” he says.
Lilium Aerospace declined to comment; no one from Lilium GmbH or Lilium eAircraft GmbH was available to comment. Goerg did not respond to a request for comment.
