Thus, the pre-insolvency work improvement procedures

Finance Thus, the pre-insolvency work improvement procedures

A new legislative package to facilitate the restructuring of companies without bankruptcy. The process will help companies get through the corona crisis through no fault of a financial crisis.


The new procedure is intended to give companies a bankruptcy new possibilities for restructuring.
The new procedure is intended to give companies a bankruptcy new possibilities for restructuring.

(Image: ©Natee Meepian –

Companies in various industries due to the Corona pandemic is under tremendous economic pressure, including a particularly service providers, the hotel industry but also in the automotive and mechanical engineering industries. The legislature has, therefore, to 1. January a new renovation option introduced to the towering wave of insolvencies counter.

The stabilisation and restructuring law in a nutshell StaRUG – to allow companies without a bankruptcy procedure to get rid of a portion of their liabilities. The date was deliberately chosen because in the 1. January, 2021 is already the suspension of the bankruptcy petition expired duty for over-indebted companies. You must now not only in the event of insolvency, but also in the case of over-Indebtedness for bankruptcy. For businesses, in which the ability to pay has already occurred, the obligation to apply for Insolvency again in October 2020. An exception to the requirement to submit since the beginning of the year only for companies that have made a request for state aid, but still no payment received.

Majority of creditors at the tone

The core of the new law, the so-called restructuring plan. With this Plan – a kind of comparison with the creditors, the company may engage in the due date or the amount of existing liabilities to its creditors. Also an intervention in securing the rights of the creditor is possible.

The big advantage is that unlike in the case of a renovation outside of this method, it is not necessary that all the creditors agree to the renovation. The creditors voting in groups. These groups are formed by the restructuring of companies. Required a majority of 75 percent in each group of Creditors is. Individual creditors who are against the Plan, and can therefore be overruled. This is to ensure that so-called chord disturber of creditors, to a force due to their blockade of special benefits – bring an economically viable remediation to Fail.

So it is enough to win the majority of the creditors for themselves. However, it is in reorganization cases, it is necessary to convince the creditors to the necessity of the planned cuts, but also of the prospects of success of the proposed measures.

Unlike in insolvency proceedings, the restructuring can decide by the end of the company, which creditors want it to appeal to the restructuring plan. So, you can exclude certain groups of Creditors and, for example, only on the restructuring of the claims of the creditors limit in order to charge the operational side of the business as little as possible. In workers ‘ rights, however, cannot be interfered with.

The managing Director must ensure for crisis early warning

Directors are required under the new rules, to monitor developments that may threaten the company’s existence. You must take appropriate counter-measures and the Monitoring body report. First of all, further regulations were planned, which would have obliged the Directors, to the looming crisis, the interests of the creditors, and not the interests of the shareholders. This far-reaching “shift of duties” in the short term from the law, deleted, and thus the consequences of Liability, which would result in a breach of the obligation.

Early termination of the contract not possible

The bill was initially provided, that contracts may be terminated on request by a corresponding court decision in advance. This should include:

In the end, the legislature has removed the point, however. The reason: This would have resulted in the Treaty partners to a high level of uncertainty. The premature termination of contracts continues to be the liquidator in an insolvency procedure, or the self-administered restructuring of companies under the supervision of an insolvency practitioner. Companies lose an opportunity, far-reaching costs.

Conclusion: the law comes at the right time

Just for manufacturing companies, which suffer from high levels of debt and the impact of the Corona pandemic, the StaRUG nevertheless, perhaps at just the right time. He finally manages a possibility, when the threat of insolvency, the groundwork early on to avoid bankruptcy.

The new law is a step in the right direction. Company for the financial restructuring, therefore, a means in the Hand, with which you together with the majority of its creditors and debt cuts, even in the face of resistance can enforce. How often companies will use this method, but it is still not clear, since the creation of the concepts and the legal advice can be quite demanding and so not for businesses of any size to be suitable.

This post comes from our partner portal Machines market.

* Volker Böhm is a specialist lawyer for insolvency law at Schultze & brown in 90411 Nürnberg Tel. (09 11) 60 07 91 61, [email protected],