NI in Insolvency Proceedings

[soundbylaura]

Uh, this doesn't sound good...

https://cdm.link/ni-insolvency/

"According to insolvency documents, Berlin-based Native Instruments GmbH (also parent to iZotope, Plugin Alliance, and Brainworx) is in preliminary insolvency proceedings. This is devastating news for one of the biggest brands in music-making technology."

[GR Baumann]

In depth:

https://cms.law/en/int/expert-guides/cm ... aw/germany

I've been burned by NI once with hardware, and never again, my entire exposure to NI is Kontakt, with a limited amount of libraries. Fuck them.

[Guy Rowland]

Whoa.

Totally out of the blue. I'm on a beta program in the NI empire which has been very active with lots of new features planned. Obvs NI includes iZotope.

Knowing nothing about how this works in Germany, but I'd have thought it's near certain the company will be sold / taken over / broken up in some way shape or form. I don't think the sky will fall in.

[Mike Greene]

Kontakt is the cash cow (Kash Kow?) of the whole business (I'm told even iZotope isn't especially profitable), so I can't imagine much change with that. Different owner, of course, but they'd have to be idiots to change much about it.

It does make me think, though, that any other company with a new sampler in the works might be well-positioned.

[Lawrence]

Just…wow. I wouldn’t thunk it, especially with their pricey licenses for, ummm…choir libraries for example….

[Guy Rowland]

I wonder if they will make some kind of statement... but what to say? As it is, their product won't exactly be flying of the shelves.

I really hope they get a good buyer. I definitely don't want them to fail, and I think their last 12-24 months have been really good. Absynth 6 shows their change of direction, that was a huge about turn policy-wise. Would hate to see all that goodwill get undone.

[GR Baumann]

No they will not Guy.

A friend of mine was insolvency administrator. As soon as the admin is appointed, the company can no longer make any statements. Expect three months max. from here on, until the admin will announce the company to continue or cease to exist.

My take: They will continue.

P.S.
Looks like Mr. Green's forum is running out of steam with all them NI related posts hammering down, extremely sluggish, down to impossible to open.

[playz123]

Sobering news. If NI is in trouble, one can only wonder about some other well-known companies as well. There are some wonderful innovations still occurring, but I can’t help but think that AI programs like Suno are also having an impact on the industry. It certainly is hoped that NI survives….. hard to imagine not having their products supported anymore, I remain optimistic though, and all we can do right now is wait and see what happens.

[Jaap]

Got this in the mail this morning as NKS partner and I saw it was shared in a blog as well on VI-C, but can't find the link right now, but guess it is no problem to share this

---------------
Dear Jaap,



I want to personally take a moment to address the recent news about Native Instruments.


Please rest assured that business continues as usual at Native Instruments, iZotope, Plugin Alliance and Brainworx. Our hardware and software products remain on sale and available for download and activation. Our passionate and dedicated teams are here and supporting customers as normal. In product and engineering, we are continuing to develop and launch new products and features. Our NKS Partnerships team continues to process Kontakt Player licences and NKS Partner submissions.


We are working diligently and responsibly to secure a healthy, financially sustainable future for Native Instruments. As you may have seen, Native Instruments GmbH has entered a restructuring process in Germany, as have 3 of our German non-operating holding companies. In legal terms, we have filed applications to open pre-insolvency proceedings for those companies.


We are focused on providing continuity for creators, customers, and partners. We’ll continue to share updates as we have them.


I’m a lifelong musician myself, and have been a passionate fan of Native Instruments for 25 years. Our mission to inspire and enable creators to express themselves through sound continues.



Nick Williams
CEO
Native Instruments

[playz123]

Oh, i’m sure that they WANT to continue, but the question remains…CAN they continue as they are currently without some major changes such as new ownership or completely restructuring? Personally, I’m hoping NI will survive somehow.

[Guy Rowland]

An update from the CEO on March 19:

https://blog.native-instruments.com/upd ... arch-2026/

We are currently in an active process to find new shareholders, with strong interest from multiple parties with deep roots in audio and technology. We see a clear path to achieve our goal to provide continuity for creators, customers, and partners.

As part of the restructuring process, Native Instruments GmbH and a number of our German entities will shortly be moving through expected legal steps, including transitioning from “preliminary insolvency” into formal “insolvency” proceedings where applicable. These are expected steps in the process we are working through

Mario (Evil Dragon) is known for solid inside NI info. He posted on VI-C just before this announcement, in response to speculation that current sales (which seem pretty normal to me) are to help with the debt:

No. The debt is going to be written off. This is how.

Mergers&Acquisitions process is underway. When a new owner is established, a new legal entity is going to be formed (it can be whatever, NI v2 GmbH, you get it), transfer of IP and workforce happens, the debt is not transferred. Old GmbH gets liquidated, new GmbH continues to operate as per usual (likely some workforce cuts are to be had in this process, as well).

[Linos]

Not sure what this means. Mario's take sounds too easy to me. You create a new legal entity, transfer everything except the dept to it, and everything is fine again. Is that a rose-tinted view of things? I'd expect creditors to be far from happy with such proceedings. Why would they agree to that? Even if they did agree, wouldn't all the burned bridges cause problems for the new entity? It might be difficult to find new creditors if previous ones have been burned.

I have little knowledge of these matters. However, I surmise that, in order to transfer IP, etc. to a new entity, the creditors must agree. They will want some form of compensation. Either that, or some payment from the owner of the new entity. Or some remuneration from future proceedings of the new entity, which would create new debt for the company.

It sounds like a lot of negotiation would be needed. Negotiations also run the risk of failing. I don't see how all the debt could be written off completely. But that's exactly what Mario is saying, if I understand him correctly. What sense would that make for the creditors?

In many comments on Vi-C, I think the wish is father to the thought. I assume it's possible that nothing much will happen to Kontakt and that operations will continue as before under a new name. Maybe that's even likely. However, I am not sure that it's the only possible outcome.

As for the CEO's statement, it doesn't contain much information. Presenting the transition from preliminary insolvency to actual insolvency as significant progress seems somewhat strange. But then again, what else can he say except that things are happening behind the scenes?

[Guy Rowland]

It does sound rather too simple, I agree, but there again the world of finance is so absurd and so often implausibly gamed that I really don't know.

Don't hate me, but I asked ChatGPT what it made of Mario's comments (I'd asked it before to try to explain to me what the hell is going on here). The final very short summary:

The structure described is real and common
But it’s not a loophole to magically escape debt
Creditors take losses, but only after assets are sold at market value
The business can continue — but often with new ownership and changes