Waldshut-Tiengen | Freiburg im Breisgau, 3 November 2026<\/strong> \u2013 On 1 November 2026, the Waldshut-Tiengen Local Court \u2013 Insolvency Division \u2013 opened insolvency proceedings in respect of the assets of the 5th AVENUE PRODUCTS TRADING GmbH<\/strong> opened<\/sup>. The court appointed Dr Andr\u00e9 Berbuer, a solicitor from the Freiburg-based commercial law firm BSK Berbuer Speier Kuhn, as the insolvency administrator<\/sup>. He had already been involved with the company during the opening proceedings in his capacity as a so-called \u2018strong\u2019 provisional insolvency administrator<\/sup>.<\/p>\n\n\n\n 5th Avenue Products Trading GmbH is the exclusive importer of Cuban Habanos cigars for Germany, Austria and Poland<\/sup>. The company was founded in 1989 by the Swiss cigar entrepreneur Heinrich Villiger in partnership with the Cuban company now known as Habanos S.A.<\/sup>. It distributes 27 brands, including Cohiba, Montecristo and Romeo y Julieta, and supplies around 1,500 specialist retailers and business partners, some of them on an exclusive basis<\/sup>. Around 50 staff are employed at the head office in Waldshut-Tiengen<\/sup>.<\/p>\n\n\n\n As a general rule, an application for insolvency is filed because a company has run out of liquidity<\/sup>. The situation is different at 5th AVENUE: the company is financially sound and has ample cash reserves as well as a well-stocked warehouse<\/sup>. However, it is not currently permitted to have either of these<\/sup>.<\/p>\n\n\n\n The insolvency is caused solely by European Union sanctions against an indirect shareholder<\/sup>. As a result of these sanctions, the company\u2019s assets are deemed to be frozen until further notice<\/sup>. Suppliers must not be paid, nor must wages and salaries be paid out, without the consent of the relevant authorities<\/sup>. Nor may the cigars in the warehouse be delivered to retailers, who have been desperately waiting for the goods for months<\/sup>. The company is therefore insolvent in the legal sense \u2013 not because it is unable to pay, but because it is not permitted to pay<\/sup>.<\/p>\n\n\n\n The sanctions are directed against Chen Zhi, a businessman believed to be of Cambodian-Chinese origin, and the Cambodian Prince Holding Group, which he founded<\/sup>. US judicial authorities have charged him with, amongst other things, fraud and human trafficking<\/sup>. It is reported that Chen Zhi holds an indirect stake in 5th AVENUE through a large number of holding companies spread across the globe<\/sup>. However, when this shareholding is taken into account across all levels of the company structure, it amounts to only a small proportion, which does not give him control over the company<\/sup>. No misconduct can be attributed to 5th AVENUE itself, its immediate shareholders or its management<\/sup>.<\/p>\n\n\n\n \u201eIn my view, the sanctions in this case go beyond what is necessary,\u201c says insolvency administrator Dr Andr\u00e9 Berbuer<\/sup>. \u201eTo the best of my knowledge, the sanctioned indirect shareholder did not have a controlling influence over the company even before the insolvency petition was filed<\/sup>. At the very latest upon the commencement of insolvency proceedings, shareholders are barred from accessing the company\u2019s assets<\/sup>. The German authorities involved are not to be blamed for this<\/sup>. They face the same difficulty as we do: the legislature has not established an adequate legal framework for dealing with assets frozen as a result of sanctions, either within or outside insolvency proceedings<\/sup>. In particular, it is unclear how the insolvency administrator is permitted to deal with frozen assets<\/sup>. The Insolvency Code stipulates that the administrator must realise the assets in this case<\/sup>. However, there is no explicit provision to this effect in German or European sanctions law<\/sup>.\u201c<\/p>\n\n\n\n Since the commencement of the insolvency proceedings, the insolvency administrator has been working in close consultation with the relevant German authorities<\/sup>. With the assistance of renowned experts in national and international sanctions law, it is working at all appropriate levels and using all available legal means to ensure that the company\u2019s assets are released<\/sup>. Under a coordination procedure established specifically for this purpose, the authorities authorise individual payments, such as those for wages and salaries, following a thorough case-by-case assessment<\/sup>. This works for a while thanks to the constructive cooperation with the relevant contacts within the authorities, but involves a considerable investment of staff time and resources for both sides<\/sup>. This procedure is not suitable as a long-term solution for the day-to-day running of a retail business<\/sup>. The aim is therefore to find a viable solution that will enable the company to return to normal business operations as quickly as possible<\/sup>.<\/p>\n\n\n\n It is not only the approximately 50 jobs in Waldshut-Tiengen that are affected<\/sup>. The specialist retailers supplied have not received any stock for months and are unable to switch to an alternative source of supply<\/sup>. Together, they employ a high three-figure number of staff; they, too, are facing financial difficulties<\/sup>. Further insolvencies in the retail sector are already expected<\/sup>. This puts the German market for premium Cuban cigars at risk as a whole<\/sup>.<\/p>\n\n\n\n Added to this is the tax revenue: from the goods sold by 5th AVENUE alone, the federal government collects tobacco duty amounting to a seven-figure sum each year<\/sup>.<\/p>\n\n\n\n \u201eParticularly at a time when public finances are under strain, it would be regrettable if a healthy business, hundreds of jobs in the specialist retail sector and seven-figure tobacco tax revenue were to be lost due to a loophole in the legislation, and if a domino effect not anticipated by the legislator were to cause lasting damage to an entire sector of the retail trade,\u201c says restructuring solicitor Basil Speier of BSK Berbuer Speier Kuhn<\/sup>. \u201eWe are working flat out at every level to find a swift solution so that specialist retailers can be supplied again and a worst-case scenario can be avoided<\/sup>.\u201c<\/p>\n\n\n\n Dr Andr\u00e9 Berbuer is a solicitor and partner at BSK and has many years\u2019 experience in insolvency administration<\/sup>. He is regularly appointed by various insolvency courts in Baden-W\u00fcrttemberg as an insolvency administrator or trustee in insolvency or self-administration proceedings<\/sup>. He has previously successfully handled insolvency proceedings triggered by the freezing of assets and is familiar with the tobacco industry<\/sup>.<\/p>\n\n\n\nInsolvent despite sufficient liquidity<\/h2>\n\n\n\n
Background to the sanctions<\/h2>\n\n\n\n
Consultation with the authorities<\/h2>\n\n\n\n
Impact on specialist retailers and tax revenue<\/h2>\n\n\n\n
About Dr Andr\u00e9 Berbuer<\/h3>\n\n\n\n
About BSK Berbuer Speier Kuhn<\/h3>\n\n\n\n