“… we are thus creating a pre-insolvency procedure that will enable companies to get back on their feet”

 

Dr. Johannes Fechner, SPD

On today, the last day of the Bundestag session this year, the implementation of the StaRUG (Corporate Stabilization and Restructuring Act) was decided on 01.01.2021. The law provides companies with an opportunity for preventive restructuring. The rapid implementation surprised even many of those involved. Some parties consider the implementation to be hasty and therefore immature, while the majority of others consider the measures to be right and important at this point in time, as today’s hearing showed.

In our opinion, the law gives companies that meet certain criteria access to further instruments from our toolbox in order to restructure and reposition themselves financially outside of insolvency proceedings. Since it has been decided at the same time to suspend the obligation to file for insolvency for a further month – i.e. until the end of January 2021 [e.g. in the event of over-indebtedness], now is exactly the right time to analyze the financial situation of your company and review the possible application. We are happy to support you in this.

The following is an excerpt from today’s debate in the Bundestag:

“It’s the economy, stupid!”, quoted Thorsten Frei, CDU/CSU, from a speech by Bill Clinton in 1992. The path of preventive structuring is the right one. “Because it manages to create a third good path between the two strands of insolvency law; between free restructuring on the one hand and restructuring with the insolvency administrator on the other, where the company is ultimately forced to hand over the reins. And with pre-insolvency restructuring, we manage to ensure that a large majority of creditors are also in a position to place their trust in the entrepreneur to lead the company out of the crisis in the interests of the creditors. That is a great opportunity,” added Thorsten Frei.

“Our economy is in crisis and we need a restructuring process that does justice to these coronavirus patients.” “The vast majority of companies we have in Germany are not in danger of insolvency in two years’ time, they are more or less already insolvent and they need help now.” The renewed extension of the obligation to file for insolvency is unsettling the economy, said Judith Skudelny, FDP, dissatisfied.

Dr. Karl-Heinz Brunner, SPD, emphasized: “with the [StaRUG]…. the legislator is now taking the right path […] to enable companies to get back on their feet faster, better and in a more legally regulated manner.”

“Creating a legal framework in which companies that are at risk of being crushed by their liabilities can obtain partial debt relief in a regulated procedure with court involvement, if at least the majority of creditors are convinced that the company can have a future as a result, certainly makes sense,” said Fabian Jacobi.

Prof. Dr. Heribert Hirte, CDU/CSU, emphasizes: “We are creating the possibility of not going into insolvency, but reaching an agreement beforehand.

Alexander Hoffmann, CDU/CSU, welcomes the new law because it “also contains effective and efficient instruments that companies will need in the coming months to combat the pandemic and the consequences of coronavirus. At the heart of this are the […] preventive restructuring measures.”

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