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Upper Austria smartwatch manufacturer Viita Watches GmbH, headquartered in Trun (Linzland region), has become insolvent. Restructuring proceedings without self-administration of the startup were opened in the Linz Regional Court on Wednesday, the Credit Protection Association KSV1870 reported.
16 employees and 30 creditors are affected. Commitments amount to 5.5 million euros. The size of the assets was initially unknown.
Algorithm change in Meta as a contributing cause
The company, founded in 2017, produces premium smartwatches. According to the insolvency application, the company was not burdened with debt in the 2022/23 financial year, but was forced to accept significant losses in the following financial year. The reason for this was changes in the display and search algorithm at Meta, Facebook's parent company, which meant that the target audience could only be reached to a limited extent, KSV1870 learns from the app.
Other reasons include loss compensation of €340,000 from the Covid-19 Financing Agency (Cofag), which was applied for in 2022 but not yet received, as well as the sudden sending of a certificate of arrears from ÖGK including a subsequent insolvency application by The health insurance fund continues.
Watches are now sold through the Bugatti store.
As part of the restructuring, a restructuring plan will be offered to creditors with a 20 percent stake. It is financed through the continuation of the company. It is now possible to sell the watches on Bugatti's sales website, which means that significant profits are expected to be made in the next few months. In addition, Viita Watches stated in its bankruptcy filing that the value of its own warehouse was more than 1.5 million euros.
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