Reply To: Native Instruments Insolvency and Updates

[LinkedMusicians]

Native Instruments’ CEO statement is pretty standard stuff for a company in this situation. Of course, his job right now — and his position is very limited, as the preliminary insolvency administrator is now in charge of things — is day-to-day operations under the supervision of the preliminary insolvency administrator is going to want him to communicate to customers, to partners, and employees some sense of normalcy, which is what that statement is about. I think the general manager of Plugin Alliance’s statement was one that, although accurate, withheld crucial facts to paint a picture that the Plugin Alliance might be able to make it through all of this without being impacted. Maybe he didn’t even write that statement himself, but I don’t think it was the right thing to do. According to the CDM info — and I know how to access the German legal documents, I just can’t read German and wouldn’t spend the time with Google Translate to sift through all of those pages for our purposes — the debt-to-earnings ratio of NI in 2023 was more than 12-to-1. I don’t think it’s realistic to insinuate that Plugin Alliance could come out of this untouched. That’s just not reality and creating that perception — which I believe his statement was attempting to do in order to make customers feel that it’s business as usual for PA — just isn’t honest IMO. The task is to comfort customers, but I think the PA GM’s statement went in the direction of misleading whereas NI’s CEO statement is honest and does the basics of explaining that they are operating normally at this time.

As I mentioned earlier, NI is operating normally at this time, in part due to Germany’s preliminary insolvency laws and protections for employees. If this were the US and using US bankruptcy laws, there aren’t the same protections for employees (that’s the reason that corporations invest so much in politics in the US — it buys them influence and legislation written that prefers them over employees and harmed consumers). The company could have fired all of its employees if this were a US Chapter 11 bankruptcy. In fact, that is still possible for NI companies headquartered in the US or other countries, like Plugin Alliance. German law protects employees for 3 months, with the government guaranteeing their salary. The US doesn’t protect them at all. A company can fire any of its employees after declaring a US Chapt 11 bankruptcy, so employees of US-based corporations owned by NI should be significantly more concerned about immediate impacts to their employment than those based in Germany. Granted, all NI employees should be very concerned, but Plugin Alliance employees should be the most concerned, because they’re far more vulnerable.

And I should caveat this with the statement that I am not a lawyer and am not giving legal advice.

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