Hanover, Germany-based record company SPV (Schallplatten Produktion und Vertrieb GmbH) submitted an application to commence insolvency proceedings on May 25 — roughly equivalent to Chapter 11 bankruptcy protection. In response to this, on May 27, the District Court of Hanover appointed the attorney Manuel Sack as the provisional insolvency administrator.

According to SPV managing partner Manfred Schütz, together with Sack, the management of SPV GmbH is is continuing working in the areas of production and distribution in the usual way while talking to potential new investors. "We keep on doing business across all segments of our portfolio," Schütz tells German trade magazine MusikWoche.

Though not all details of the new company structure are finalized yet, SPV will still exist in the future under its company name. "We definitely see potential for ongoing business of the company," attorney Sack confirms. "Currently we're still in the state of applying for insolvency proceedings."

Sack is convinced that SPV will be able to carry on beyond August 1. However, the first step is to find a solution via external investors. "We are currently in negotiations with a huge number of potential partners," says Sack. Based on the interest of competitors, he's confident that SPV will be able to "to work out a medium- or long-term-solution scenario."

Prior to the commencement of insolvency proceedings, several companies had expressed interest in taking over SPV, including edel, Warner Music, the Groove-Attack companies and Universal. Sack and Schütz don't want to name the current interest holders or confirm any of them at this stage. "All our activities are focused on the aim to do ongoing business with SPV after the process of insolvency and to keep and ensure the essential and basic assets of the company," Schütz emphasizes.

An ongoing international artist relationship and export business is planned, though in a restructured and cost-optimized way, as the fixed costs of the previous setup have proven to be too much for an enterprise like SPV to handle. SPV also shut down both offices in the USA, but has now decided to work alongside former product manager Maria Ouellette to secure ongoing U.S. business. Furthermore digital distribution and marketing and the audio book market are "important focal points."

"Of the formerly 124 employees, there are currently around 80 people working at SPV," says Schütz. Head of sales for Germany/Austria, Jörg Peter, just left the company, and was replaced by former JTV and TMI employee Sven Gerke. All sales representatives and the export department team remain intact. Martin Ruder, former Head of Label management, is about to leave the company.

"Of course, we had to face a certain level of restraint in the daily business relationship with some of the most important retail partners like MediaMarkt and Amazon," Sack admits. "After having cleared the various legalities, we now proceed with doing noteworthy business. We notice a stabilization of the overall situation and we're able to offer the full power of our company portfolio to all artists and labels." Schütz agrees: "We are aware of having caused uncertainties at our business partner side, but in fact we also received an overwhelming feedback of believe, trust and positive stimulation to move onwards from various parties." Schütz also concedes "homemade mistakes" in the past — a reason why there won't be any more artist deals with unrealistic advances at SPV in the future. "We are mainly looking for mid-size releases that keep us on a financially safe and reliable level," says Schütz.

The SPV team is currently putting together a completely reworked release schedule starting August 2009. For the 25th anniversary of SPV there will be a sampler available plus new releases from ANNIHILATOR, THE MISSION and ICED EARTH in September; HELLOWEEN, SKINNY PUPPY, WELLE:ERDBALL and a new MAX RAABE DVD in October; DIE KRUPPS, THE ANSWER and a new studio album by KLAUS SCHULZE in December. All releases will be supported by substantial promo/marketing campaigns.

SPV was founded by Manfred Schütz in 1984. The company is considered to be one of the leading international heavy metal labels and includes groups such as TYPE O NEGATIVE, SEPULTURA, SAXON, HELLOWEEN, GAMMA RAY, MOONSPELL, KREATOR, ICED EARTH and MOTÖRHEAD as well as non-metal acts such as JOHN LEE HOOKER.