Germany: Insolvency/Bankruptcy

Pre-insolvency restructurings can fail when individual creditors block viable solutions to negotiate better outcomes. The insolvency plan's cram-down mechanism enables court confirmation despite dissenting votes, provided dissenting groups receive legal protection and aren't unduly disadvantaged. Understanding cram-down logic helps stakeholders assess restructuring options and risks before insolvency occurs.

The creditors' committee serves as a crucial oversight body in German insolvency proceedings, wielding significant monitoring and co-determination powers over the insolvency administrator.

A crisis at the cash-pool leader does not automatically make cash pooling impermissible. It does, however, materially intensify the review, monitoring and documentation duties of managing directors at the level of each participating company. The key issues are recoverability of the repayment claim, practical access to pooled funds and protection of the company’s own minimum liquidity.

Die Lage für die deutsche Wirtschaft im Jahr 2025 bleibt herausfordernd. Der ‚Standort Deutschland‘ steht plötzlich wieder in Frage.

With entry into force of the Act on the Stabilization and Restructuring Framework for Enterprises (StaRUG) on January 1, 2021, an independent preventive restructuring framework was established to complement existing insolvency law.

Mit dem Inkrafttreten des Gesetzes über den Stabilisierungs- und Restrukturierungsrahmen für Unternehmen (StaRUG) am 1. Januar 2021 wurde ein eigenständiger präventiver Restrukturierungsrahmen geschaffen.

Within German contract law, the principle of being bound by a contract (pacta sunt servanda) (i.e., the obligation to fulfill an agreement) applies. However, in the case of the insolvency of one of the contract parties...

Dismissals due to plant closure may remain effective even if the plant is sold later – the importance of a list of impacted employees ("Namensliste").

The Management Board (der Vorstand) must initiate appropriate means and measures to recognize any damaging developments that might threaten the survival of the company.