Submitted by: Submitted by Ana123456
Views: 10
Words: 12670
Pages: 51
Category: Business and Industry
Date Submitted: 06/07/2016 01:44 AM
Harvard Business School
9-795-120
rP
os
t
Rev. January 26, 1998
Germany’s Evolving Privatization Policies:
The Plaschna Management KG
by I. J. Alexander Dyck and Karen Hopper Wruck*
op
yo
In the fall of 1994, Horst Plaschna sat in his office looking over Alexanderplatz, the central square
in East Berlin. Over the last several years, as market forces took hold in eastern Germany, this view
had changed dramatically. Western firms flooded across the former border, purchasing eastern
companies and setting up subsidiaries to sell goods from around the world. Construction cranes
crowded the skyline. Unfortunately, in spite of substantial progress, many of eastern Germany’s
economic and social problems remained unresolved. Plaschna was only too familiar with these
problems.
tC
Plaschna was a restructuring expert with extensive experience in the West German steel and
banking industries. In addition, he had led the turnaround of Deutsche Anlagen-Leasing (DAL), a
large western property holding fund that many considered one of the most successful restructuring
efforts in Germany history. In 1992, Plaschna entered into a unique and controversial three-year
“Management KG” (KG, Kommanditgesellschaft or commercial limited partnership) contract with the
Treuhandanstalt (Treuhand, pronounced “troy-hahnt”), Germany’s privatization agency. The KG
contract represented an attempt to “privatize the privatization process.” Under it, Plaschna took
responsibility for restructuring nine of the Treuhand’s troubled eastern German firms and selling
them to private investors. In exchange, the Treuhand provided financial assistance to the companies
and, at the end of three years, would pay Plaschna and his associates a cash bonus of up to
DM 6 million, depending on his success in selling the firms and in securing employment and
investment guarantees from buyers.
No
Two and a half years later, Plaschna had sold two of the nine firms and parts of others.
Unfortunately, the three-year...