French court orders ailing Aspocomp to pay former workers billions in damages

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The troubles of the circuit board manufacturer Aspocomp continue. In a ruling handed down on Tuesday, France's Supreme Court decided after a lengthy legal battle to order the company to pay the former employees of Aspocomp SAS, the French subsidiary that was closed down in 2005, EUR 11 million in damages, plus interest, to the tune of EUR two million.
      The decision sparked a powerful reaction on the Helsinki Stock Exchange, with Aspocomp shares losing 19.6 per cent of their value. Analysts were wondering if the company will survive at all.
     
The Aspocomp management insisted on Wednesday that the court's decision will have no immediate effect on the company's ability to pay its bills. The loss-making company is in economic difficulties anyway, but CFO Tapio Engström says that the ruling will not cause any acute liquidity problems.
      Aspocomp has made agreements with banks, who have promised to pay the compensations to the company's former employees. Aspocomp says it will repay the banks later.
      In addition to liquidity, the court's decision will also affect Aspocomp's economic self-sufficiency. The French court's decision, which comes on the heels of Friday's announcement that Aspocomp would shut down its plant in Salo, are pushing down the level of the company's own capital in its balance sheets to a very low level - just over ten per cent.
     
Under Finnish law, a company must file for bankruptcy if its own capital runs out. There is still a way to go before this happens; thanks to a share issue earlier this year, the company's own capital continues to exceed EUR 20 million, even after the write-offs.
     
The disputes in France date back to the spring of 2002 when Aspocomp closed down the loss-making circuit board factory in Everux and pushed its French subsidiary into bankruptcy. The 388 employees demanded, and got, damages equivalent to 6-18 months of pay for wrongful termination.
      The legal argument has focused on if the plaintiffs were seen as employees of the Finnish Aspocomp or its French subsidiary. The court ruled that Aspocomp was the legal employer.
      Aspocomp CEO Maija-Liisa Friman denounced the ruling as a "purely political decision".
      "The best possible legal experts have been with us both from this country and France. Their strong opinion has constantly been that we will win this case."


Previously in HS International Edition:
  Aspocomp searching for partner in circuit board manufacture (19.6.2007)

Helsingin Sanomat