Restructuring
Recognizing and Managing Corporate Crises in Germany
Companies in Germany must react quickly when profitability declines, liquidity bottlenecks arise, or financing partners lose confidence. Thoroughly planned restructuring can often prevent judicial insolvency proceedings and stabilize the company in the long term.
Our lawyers specializing in insolvency law assist French and German companies, as well as international corporate groups, with the legal analysis of their financial situations and the implementation of appropriate solutions. They always engage in constructive dialogue with courts and creditors.
Summary
When should corporate restructuring and reorganization be considered?
Restructuring financing should be considered as soon as liquidity problems arise, especially if they are accompanied by recurring losses. This measure allows you to adjust your company’s structure, renegotiate liabilities with banks and suppliers, and sell certain assets or business areas.
Our lawyers specializing in insolvency law will work with you to conduct a thorough analysis of your company, identify financial risks, and determine the legal options available to protect your core business activities.
What alternatives are there to judicial insolvency proceedings in Germany?
In addition to the measures taken during the initial stages of a crisis, such as negotiating with creditors (banks, suppliers, and customers) or restructuring the company’s structure, Germany offers a preventive procedure under the Corporate Stabilization and Restructuring Act (Unternehmensstabilisierungs- und Restrukturierungsgesetz – StaRUG). Similar to judicial reorganization proceedings, this procedure is applicable only if the company is threatened with insolvency but is not yet insolvent.
Our lawyers specializing in insolvency law ensure the preparation and implementation of such measures, draft the necessary agreements, and represent you in strategic negotiations.
When should insolvency proceedings be initiated in Germany?
According to § 15a of the German Insolvency Act (Insolvenzordnung – InsO), management is required to apply for the opening of insolvency proceedings within three weeks of the onset of inability to pay or six weeks of the onset of over-indebtedness, whichever is sooner. Failure to comply may result in civil and criminal consequences.
Our lawyers specializing in corporate insolvency will carefully analyze your company’s financial situation, assess the legal consequences, and guide you through the entire process.
What procedural options are available in insolvency proceedings in Germany?
Insolvency proceedings typically start with preliminary proceedings to examine the company’s economic situation and determine if there are sufficient assets to cover the costs of the proceedings.
These proceedings may then transition into classic proceedings with an insolvency administrator. Alternatively, if certain conditions are met, the company may enter into a form of self-administration, whereby the company’s management remains in office under the supervision of the court.
One type of self-administration is the protective shield procedure, which is reserved for companies that are economically and operationally viable. This procedure allows for court-protected restructuring based on an insolvency plan.
Our lawyers specializing in insolvency law will analyze your company’s economic and legal situation and recommend the most suitable procedure.
You have any other questions?
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