作者

Julia Siedhoff

高级律师

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作者

Julia Siedhoff

高级律师

Read More

2021年9月8日

R&I Update – September 2021 – 3 / 5 观点

German Code for Restructuring and Insolvency Law Development – stricter self-administration requirements introduced

  • Quick read

The German Code for Restructuring and Insolvency Law Development (SanInsFoG) came into force in early 2021, resulting in significant changes to the Insolvency Code. The changes impact both self-administration proceedings (where the debtor retains possession and control of its assets in insolvency proceedings, usually to implement a restructuring) and protective shield proceedings (where the debtor develops an insolvency plan). The requirements for self-administration proceedings have become stricter.

Liquidity forecast

The company has to submit a liquidity forecast for the six months after the opening of proceedings. The forecast must include both the costs of continuing business operations in self-administration and the costs incurred in the proceedings. All positive and negative effects of the self-administration proceedings must be taken into account, including cost-saving effects (eg pre-financing of funds for the administration) and negative effects (eg changes to payment terms by contractual partners).

Changes to management 

The company has to be supported by a managing director, who is appointed for the self-administration proceedings, a general representative or an insolvency law advisor. These advisors ensure that insolvency law obligations are fulfilled during the self-administration proceedings. Furthermore, the administrator appointed by the court is to be granted insight into all business transactions.

Outlook 

While the requirements for self-administration proceedings have increased and additional preparation is required, the hurdle to enter protective shield proceedings is no longer as high. This could lead to protective shield proceedings becoming a more attractive option for debtors.

Find out more

To discuss the issues raised in this article in more detail, please reach out to a member of our Restructuring & Insolvency team.

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