Restructuring
Directors’ Liability in Germany
During times of economic crisis, especially after the initiation of insolvency proceedings, German companies are required to maintain their corporate governance and fulfill all legal obligations. Transitioning from regular to crisis-specific governance strategies requires profound changes to management and decision-making structures.
Our corporate and insolvency law experts will help you organize your corporate governance in a legally compliant manner, make strategic decisions, avoid legal disputes, and protect your management.
Summary
What impact is the crisis having on corporate governance?
The governance strategy after insolvency proceedings depend on the type of proceedings. In classic proceedings, an insolvency administrator takes over the management of the company. In self-administration, the management remains in office but is supervised by a court-appointed trustee. In both cases, management must collaborate closely with the insolvency administrator, trustee, creditors, and works council to overcome the crisis in accordance with the law.
Our lawyers can support you in communicating with these parties.
How is management liable in a corporate crisis?
Management is required to act with caution, loyalty, and diligence. In the event of mismanagement or delayed filing for insolvency, management may be held personally liable for missing insolvency assets, professional disqualification, or delay in filing for insolvency, among other things.
Our lawyers specializing in insolvency law can explain how to avoid risks, comply with legal obligations, and document strategic decisions. If a dispute arises, we will represent you in court.
What responsibilities does management have toward employees?
During times of corporate crisis, management bears a great deal of responsibility toward its employees. Management is obligated to uphold collective participation rights, inform the works council in a timely manner, and negotiate a social plan if necessary. Clear and transparent communication is essential to ensure internal stability and appropriately consider social factors when implementing personnel measures.
Our lawyers will accompany you in discussions with the works council and ensure compliance with all labor law obligations.
You have any other questions?
Please feel free to ask them directly here.