§ 1 Purpose; number of founders
Limited liability companies may be formed by one person or several persons in accordance with the provisions of this Act for any purpose permitted by law.
Information for non-professionals
To Information for legal professionals
Relevance for legal relations
a) General information
1A limited liability company (GmbH) is (irrespective of its statutory purpose) a commercial company with a corporate organization and its own legal personality. It has a share capital determined in its articles of association (§§ 5, 5a GmbHG), which corresponds to the sum of the contributions to be paid by the shareholders on the shares.
The shareholders are not liable for liabilities created by the GmbH and are exclusively obligNoack/Servatius/Haas/Fastrich, GmbHG, 23. Ed. (2022), Intr. Rn. 1
ed to raise the share capital (§
A subform of the GmbH is the Unternehmergesellschaft (haftungsbeschränkt), or UG for short (
b) Legally permissible purpose
2
c) Shareholders
3According to the wording of
4d) On insolvency law: The GmbH in the restructuring
Table of contents
(1) Introduction
(a) The term "crisis" and phases of a crisis
(b) Reasons for filing for insolvency
(aa) Insolvency, Sec. 17 InsO
(bb) Imminent insolvency, Sec. 18 InsO
(cc) Overindebtedness , Sec. 19 InsO
(c) Legal aspects of the crisis
(aa) Crisis prevention
(bb) Early crisis detection through risk controlling
(cc) Crisis management
(aaa) Duty of the managing directors to restructure, Sec. 1 I 2 StaRUG
(bbb) Convening of the shareholders' meeting , Sec. 49 III GmbHG
(ccc) Tension between out-of-court restructuring and filing for insolvency in the event of imminent insolvency
(ddd) Obligation to file for insolvency pursuant to Sec. 15a InsO
(eee) Liability
(dd) Criminal law aspects of the crisis
(2) Restructuring outside a structured procedure
(a) General / Restructuring concept
(b) Restructuring measures
(aa) Financial restructuring measures
(bb) Company sale
(cc) Liquidation
(3) StaRUG proceedings
(a) General
(b) Restructuring plan and judicial restructuring framework
(c) Restructuring moderation, Sec. 94 to 100 StaRUG
(d) Practical example: Restructuring of a holding company
(4) Debtor-in-possession-management, Sec. 270 ff. InsO
(a) General, Aim of debtor-in-possession-management
(b) Preliminary debtor-in-possession-management
(c) Debtor-in-possession-management in opened proceedings
(aa) Requirements for the order of debtor-in-possession-management
(bb) Legal status of the insolvency monitor
(cc) Repeal
(5) Protective Shield Proceedings
(a) Norm Purpose
(b) Practical example: Restructuring of a sales company of a globally operating wine wholesale company
(6) Regular procedure (third-party management)
(a) General
(b) Insolvency opening proceedings
(aa) Insolvency filing
(bb) Provisional insolvency administration
(aaa) Preliminary insolvency administrator
(bbb) Strong preliminary insolvency administrator
(dd) Other provisional measures
(ee) Insolvency allowance
(c) The person of the insolvency administrator
(d) Effects of the opening of proceedings
(aa) General effects
(bb) Existing legal transactions
(cc) Insolvency avoidance
(dd) Administration and liquidation of the insolvency estate
(e) Costs of the insolvency proceedings
(f) Insolvency plan
(aa) General
(bb) Submission authorization
(cc) Components of the insolvency plan
(dd) Voting procedure
(ee) Confirmation of the insolvency plan
(ff) Legal effects of the insolvency plan
(gg) Tax treatment of reorganization profits in insolvency plan proceedings
(g) Practical example of an asset deal: Transferring the reorganization of a specialty mechanical engineering company
(h) Practical example of an insolvency plan: Restructuring of a spa company
(1) Introduction
(a) The term "crisis" and phases of a crisis
5The business crisis begins well before the entry into material insolvency and finally reaches its climax with the existence of a reason for insolvency (impending insolvency/overindebtedness).BGH, Beschl. v. 29.10.2020 – 5 StR 618/19 = NStZ 2021, 308
Business crisis
6Prior to the onset of material insolvency, various phases can be distinguished in the course of a business crisis. These can be distinguished from one another on the basis of typical symptoms, whereby the individual crisis stages classically, but not necessarily, occur in succession, but can also overlap in the course of the crisis (see below).BGH, Beschl. v. 29.10.2020 – 5 StR 618/19 = NStZ 2021, 308
Figure 1: Adapted from: Schmidt/Uhlenbruck/Sinz, GmbH in Krise, Sanierung und Insolvenz, 5th ed. (2016), Sidenr. 1.2
7The stakeholder crisis is the earliest stage of the crisis and is characterized by dwindling trust and a declining willingness to cooperate among stakeholders and in relation to the company.Compare Bea/Dressler, NZI 2021, 67 Typical signs of this phase are a decreasing willingness to perform on the part of the employees as well as increasing carelessness. Controlling results are ignored and cohesion within the company dwindles. As a result, the trust of external stakeholders (e.g. customers or suppliers) also dwindles. The lack of cohesion between internal and external stakeholders results in undesirable developments not being recognized and communicated, so that these developments are driven even further.Compare Schmidt/Uhlenbruck/Sinz, GmbH in Krise, Sanierung und Insolvenz, 5. Ed. (2016), Sidenr. 1.4
8In the strategy crisis, a divergence increasingly develops between the targeted and actual position in the competitive environment. The strategic orientation of the company is not (or no longer) suitable for achieving the desired position in the competitive environment or for securing it in the long term.
9Examples of such a strategic crisis include Blackberry and Nokia. Both manufacturers failed to recognize the potential of the "smartphone" in time and therefore lost their exposed competitive positions.
10If a strategy crisis is not recognized, the strategic misalignment initially results in a stagnation of demand for previously successful products, but in the long term in a decline in demand for these main sales drivers. If this trend continues and becomes entrenched, it eventually leads to declining sales figures.Schmidt/Uhlenbruck/Sinz, GmbH in Krise, Sanierung und Insolvenz, 5. Ed. (2016), Sidenr. 1.6.; Thierhoff/Müller/Beck/Stannek, Unternehmenssanierung, 3. Ed. (2022), Chapt. 12 Sidenr. 78 Typically, inventory builds up during this phase, mostly due to attempts to compensate for declining production capacity utilization. In addition, marketing measures usually no longer have an impact and the sales channels also do not function as desired, so that there is often a reduction in sales figures and ultimately also the first effects on the financing structure.Thierhoff/Müller/Beck/Stannek, Unternehmenssanierung, 3. Ed. (2022), Chapt. 12 Sidenr. 78
11If the decline in sales continues, profits will soon no longer be generated. This is followed by losses and a depletion of equity.Schmidt/Uhlenbruck/Sinz, GmbH in Krise, Sanierung und Insolvenz, 5. Ed. (2016), Sidenr. 1.7 The deteriorated operating performance is now visible in the balance sheet. There is a threat of balance sheet over-indebtedness. The deterioration in the balance sheet ratios also reduces the creditworthiness of the company.See Footnote 6
12Due to the lack of capital resources, liquidity bottlenecks occur, additional loans have to be taken out and, if necessary, loans are cancelled, or credit lines are shortened. Reminders from creditors accumulate, arrears with the tax office and social security agencies arise. If the liquidity crisis cannot be overcome, it ultimately leads to insolvency.
(b) Reasons for filing for insolvency
13The occurrence of material insolvency represents the climax of the corporate crisis. The threat of insolvency, which is regulated in Sec. 18 InsO and precedes insolvency, plays a special role in this context, as it entitles the managing director to file an insolvency petition in accordance with Sec. 18 I InsO, but does not oblige him to do so. Therefore, there is no talk of the GmbH being insolvent until insolvency or overindebtedness has occurred. In fact, the insolvency reason of over-indebtedness plays a minor role. In order to respond appropriately to the current ongoing energy crisis, the German parliament, based on a draft bill of the federal government,Compare Änderungsantrag der BR zu BR-Dr. 20/2730 has decided to make adjustments to the forecast period for determining over-indebtedness, the maximum period for filing an application due to over-indebtedness and the planning period for self-administration and restructuring plans.BT-Dr. 20/4087 The corresponding changes are discussed at the relevant places.
(aa) Insolvency, Sec. 17 InsO
14According to Sec. 17 II 1 InsO, a GmbH is insolvent if it is unable to meet its payment obligations as they fall due. In order to determine the insolvency, it is determined on a reference date what free cash is immediately available to meet the payment obligations due. If all liabilities due on the reporting date can be covered, the debtor company continues to be solvent. In the event of an existing shortfall in cover, in order to exclude only temporary payment stagnations from the definition of insolvency, it is determined in a second step whether the liquidity gap that has arisen can be closed again within a short period of time. The Federal Court of Justice has established that a company is insolvent if a liquidity gap that cannot be closed within three weeks accounts for at least ten percent of its total liabilities.Compare nur BGH, Urt. v. 24.5.2005 – IX ZR 123/04 = NZI 2005, 457; BGH, Urt. v. 17.11.2016 – IX ZR 65/15 = NZI 2017, 64
15This liquidity gap is determined by drawing up a liquidity balance sheet in which all liabilities falling due on the reporting date and in the three-week observation period following the reporting date are compared with the free cash and cash equivalents available in this period.
16The ten percent hurdle is the rule, but is not a rigid limit.Schmidt/Schröder, InsO, 9. Ed. (2022), Sec. 17 Sidenr. 29 bezugnehmend auf BGH, Urt. v. 24.5.2005 - IX ZR 123/04 = NZI 2005, 547 In exceptional cases, deviations can be justified. In the case of a liquidity gap of less than ten percent, insolvency may be assumed if it can be assumed that the ten percent will soon be exceeded. However, despite exceeding the ten percent hurdle, solvency can still be assumed if, due to special circumstances, it can be assumed that the liquidity gap will soon be closed completely or at least almost completely.BGH, Urt. v. 17.11.2016 – IX ZR 65/15 = NZI 2017, 64
17In practice, liquidity planning over a thirteen-week period (13-week liquidity planning) has become established as the usual procedure.Schulz, NZI 2020, 1073 (1074); gegen einen Prognosezeitraum von über drei Monaten Compare Uhlenbruck/Mock, InsO, 15. Ed. (2019), Sec. 17 Sidenr. 25 The choice of this period also appears to make sense here, as the inclusion of further weeks, on the one hand, reduces the likelihood of the management being liable to prosecution for insolvency violations and, on the other hand, creates better transparency for other stakeholders.
18According to Sec. 17 II 2 InsO, the insolvency of the company is presumed if the company has ceased its payments. This is the case if circumstances become apparent to legal transactions which indicate that the company can no longer meet its payment obligations. Such circumstances may be, for example, the late payment of social security contributions or tax claims, as well as arrears in wages, operating costs or insurance contributions.Compare nur BGH, Beschl. v. 15.11.2018 – IX ZR 81/18 = BeckRS 2018, 32036; Stürner/Eidenmüller/Schoppmeyer/Eilenberger, InsO, 4. Ed. (2019), Sec. 17 Sidenr. 29
(bb) Imminent insolvency, Sec. 18 InsO
19Pursuant to Sec. 18 I InsO, imminent insolvency also constitutes a ground for opening insolvency proceedings within the meaning of Sec. 16 InsO. In addition, imminent insolvency is a prerequisite for entry into the proceedings under the stabilization and restructuring framework of StaRUG. Companies should have the option of entering structured restructuring proceedings as early as possible in order to increase their chances of reorganization. The fact that there is only the option of filing an application on one's own prevents creditors from "pushing" the company into regular insolvency proceedings at an early stage before insolvency occurs.Compare BT-Dr. 12/2443, 114
20According to Sec. 18 II InsO, the company is threatened with insolvency if it is not expected to be able to meet its due payment obligations over a prog-nosis period of 24 months. In order to be able to make such a forecast of (in)solvency, all existing liabilities and those that are expected to arise and fall due during the forecast period must be compared with the cash and cash equivalents available at the respective expected due dates. If the comparison shows that the company will not be able to meet the liabilities then due at any time within the forecast period of 24 months, it must be regarded as being in imminent insolvency. In contrast to the determination of insolvency, it is not important here whether a liquidity gap is only temporary. The decisive factor is whether or not the company is likely to be able to meet all its liabilities as they fall due during the 24-month forecast period.Fridgen/Geiwitz/Göpfert/Wolfer, BeckOK Insolvenzrecht, 26. Ed. (2022), Sec. 18 Sidenr. 22; Uhlenbruck/Mock, InsO, 15. Ed. (2019), Sec. 18 Sidenr. 20
21In the event of imminent insolvency, the managing director of the GmbH is not yet obliged to file an application. In addition, the obligations under Sec. 1 StaRUG take effect at the latest at this point, since the imminent insolvency represents an event that endangers the existence of the company.
22In the case of joint power of representation, the application to open insolvency proceedings in the event of imminent insolvency can only be filed jointly by all managing directors appointed to represent the company, Sec. 18 III InsO. In addition, the GmbH managing director should obtain a resolution from the shareholders' meeting in order not to be exposed to possible claims for damages, whereby the managing director is obliged to inform the shareholders anyway under Sec. 1 StaRUG (cf. the situation regarding the notification of a restructuring matter under the StaRUG).
(cc) Overindebtedness , Sec. 19 InsO
23According to Sec. 19 II 1 InsO, over-indebtedness exists if the assets no longer cover the existing liabilities (irrespective of the due date), unless the continuation of the company in the next twelve months is considered predominantly probable. In contrast to imminent insolvency, the forecast period is shortened from 24 months to 12 months. According to the most recent decision by the German parliament, the forecast period is temporarily reduced to four months in order to avoid the obligation to file for insolvency for companies whose continued existence would be out of the question if the current uncertainties were disregarded.BT-Dr. 20/4087; Amendment by the Federal Government with regard to BR-Dr. 20/2730 S. 5 In practice, this means that a company that does not become insolvent within the next four months is not overindebted. The reduction is not linked to any further preconditions. The provision also applies to companies that were already over-indebted before the relevant amendment to the Act came into force, but the relevant point in time for filing a timely application within the meaning of Sec. 15a I 1 has not yet passed.See Footnote 21
In order to determine the over-indebtedness status, a going concern forecast for the next twelve months must therefore be prepared in addition to the examination of the balance sheet over-indebtedness.
24The test of balance sheet over-indebtedness is a purely hypothetical one. For this purpose, all existing liabilities are compared with the company's assets, irrespective of when they are due. On the liabilities side of this over-indebtedness balance sheet, all monetary insolvency claims within the meaning of Sec. 38 InsO must be taken into account. Subordinated claims as defined in Sec. 39 InsO must also be recognized as liabilitiesUhlenbruck/Mock, InsO, 15. Ed. (2019), Sec. 19 Sidenr. 161; K. Schmidt/Schmidt, InsO, 19. Ed. (2016), Sec. 19 Sidenr. 35 , unless there is a qualified subordination as defined in Sec. 19 II 2 InsO. Assets are recognized at liquidation values, i.e. adjusted for hidden reserves and taking into account expected expenses for the sale, as well as expected losses in value depending on the speed of liquidation.Fridgen/Geiwitz/Göpfert/Wolfer, BeckOK Insolvenzrecht, 26. Ed. (2022), Sec. 19 Sidenr. 21 f. Caution is generally required when determining the liquidation values in order to prevent the risk of liability due to breach of the obligation to file for insolvency.Compare dazu Uhlenbruck/Mock InsO, 15. Ed. (2019), Sec. 19 Sidenr. 130 ff.
25Only if the liabilities side of this balance sheet exceeds the assets side (see below) can over-indebtedness be considered as a reason for opening insolvency proceedings within the meaning of Sec. 19 InsO. However, this can only be affirmed with the legal consequence of the obligation to file an application if, in addition, the forecast of the company's ability to continue as a going concern, which is to be prepared in the second step, is negative. In the case of a positive going concern prognosis, however, there is no over-indebtedness within the meaning of Sec. 19 InsO.
Figure 2:
Comparison of non-overleveraged/overleveraged balance sheet with presentation of loss carryforward on the assets side for illustrative purposes.
(Adapted from: https://www.rwi.uzh.ch/static/elt/lst-vogt/gesellschaftsrecht/charakter/de/html/kapverlustuebersch_ueberschuldung.html)
26A favorable going concern assumption requires the will to continue as a going concern and the ability of the company to survive. The assessment of the ability to survive is made on the basis of a meaningful financial plan.BGH, Beschl. v. 9.10.2006 – II ZR 303/05 = NZI 2007, 44 The purpose of preparing a going concern forecast is to ensure that creditors are satisfied.Uhlenbruck/Mock, InsO, 15. Ed. (2019), Sec. 19 Sidenr. 220 The forecast must therefore be negative if the financial plan shows that it is highly unlikely that the company will be able to meet its liabilities as they fall due during the forecast period (cf. impending insolvency).Braun/Salm-Hoogstraeten, InsO, 9. Ed. (2022), Sec. 19 Rn 17
(c) Legal aspects of the crisis
(aa) Crisis prevention
27The regulations on capital resources and capital maintenance for the GmbH already ensure basic risk provisioning.Compare Schmidt/Uhlenbruck/Schmidt, GmbH in Krise, Sanierung und Insolvenz, 5. Ed. (2016), Sidenr. 1.31 ff. These include the obligation to make contributions, the liability for differences in the event of overvaluation of contributions in kind or the default liability under Sec. 24 GmbHG. This also includes Sec. 30, 31 GmbHG (prohibition of payment and duty of reimbursement), which serve to maintain the capital stock, and the duty to keep accounts pursuant to Sec. 41 GmbHG.
28The obligation to convene a shareholders' meeting in the event of a loss amounting to half of the share capital, as codified in Sec. 49 III GmbHG, is also one of the mechanisms of crisis prevention.
(bb) Early crisis detection through risk controlling
29According to Sec. 1 I StaRUG, the managing director of the GmbH is obliged to permanently take measures for early crisis detection. The early recognition of risk factors provides the company with a larger time frame within which it can act to avert the crisis and thus increases the chances of a successful and sustainable crisis response.Morgen/Gerig, StaRUG, 2. Ed. (2022), Sec. 1 Sidenr. 1 The monitoring obligation contained in Sec. 1 I StaRUG applies to the managers of all legal entities. Sec. 1 I StaRUG does not contain any specific requirements for the design of a crisis early warning system. The content and scope of the monitoring system are determined by the size and complexity of the company.BT-Dr 19/24181, 104 Depending on their business purpose, companies are also exposed to different risk factors. Risk controlling must keep this in mind.Compare Scholz/Schneider, GmbHG, 10. Ed. (2006), Sec. 43 Sidenr. 96 Irrespective of the size of the company, the managing directors are required to continuously monitor and review the conditions of the GmbH and developments relevant to the company's operations to determine whether they have the potential to jeopardize the company's continued existence if they continue unhindered.BT-Dr 19/24181, 104 The minimum requirement, irrespective of the size of the company, is proper accounting in accordance with general requirementsCompare Sec. 41 GmbHG and integrated income and liquidity planning for the period of 24 months.Gottwald/Haas/Haas/Kolmann/Kurz, Insolvenzrechts-Handbuch, 6. Ed. (2020), Sec. 90 Sidenr. 12
(cc) Crisis management
(aaa) Duty of the managing directors to restructure, Sec. 1 I 2 StaRUG
30In times of crisis, the managing director's duty to manage the company changes, at least partially, into a duty to restructure pursuant to Sec. 1 I 2 StaRUG.Müller/Winkeljohann/Axhausen, Beck’sches Handbuch der GmbH, 4. Ed. (2009), Sec. 15 Sidenr. 121
31The duty to take countermeasures under Sec. 1 I 2 StaRUG applies to the managing director from the onset of the first symptoms of a crisis. At the same time, Sec. 1 I 2 and 3 StaRUG require the managing director to immediately report to the supervisory bodies on the measures taken and, if they are responsible, to work towards their referral. Further obligations remain unaffected under Sec. 1 III StaRUG. The various obligations under company law and insolvency law that affect the managing director in the further course of the crisis () therefore continue to apply.
32The managing director must examine the company's ability to restructure and, if necessary, draw up a suitable restructuring concept. This includes the examination and subsequent implementation and monitoring of financial and performance-related restructuring options (for more details on out-of-court restructuring, see B below).
(bbb) Convening of the shareholders' meeting , Sec. 49 III GmbHG
33If the equity capital is depleted to half of the nominal capital figure, the managing director must immediately convene the shareholders' meeting in accordance with Sec. 49 III GmbHG. It should be noted, however, that this also applies in cases where the managing director becomes aware of such a loss without preparing an interim balance sheet.Sog. „Bilanz im Kopf des Geschäftsführers“; Compare Baumbach/Hueck/Zöllner, GmbHG, 20. Ed. (2013), Sec. 49 Sidenr. 20; Beck/Depré, Praxis der Insolvenz, 3. Auflage (2017), Sec. 33 Sidenr. 10
(ccc) Tension between out-of-court restructuring and filing for insolvency in the event of imminent insolvency
34If the company is already at the stage of imminent insolvency, the managing director is caught between the interests of the shareholders and those of the creditors. The filing of a petition for insolvency, which is possible but not obligatory after the onset of imminent insolvency, and the subsequent opening of insolvency proceedings have various disadvantages for the shareholders. First of all, claims for repayment of a shareholder loan or claims arising from legal acts which economically correspond to such a loan are only satisfied on a subordinate basis pursuant to Sec. 39 I No. 5 InsO. With the opening of insolvency proceedings, the shareholders also suffer a loss of control through the transfer of the power of disposal to the insolvency administrator, Sec. 80 I InsO. In contrast to the managing director, they are not authorized to issue instructions to the insolvency administrator. Furthermore, in the final distribution, the shareholders only receive the surplus which results after the complete satisfaction of all creditors, Sec. 199 InsO. Such a surplus rarely occurs, so that as a rule the shareholders can no longer expect any income from their participation when insolvency proceedings are opened.
35If the managing director files for insolvency when insolvency is imminent, he may be ignoring the interests of the shareholders. For this reason, it was previously mandatory for the managing director to obtain a shareholders' resolution in the event of impending insolvency if he wished to file an application. The absence of a resolution had no effect on the validity of the application, but could lead to liability in the internal relationship if the shareholders suffered financial damage.Geißler, ZInsO 2013, 919; Uhlenbruck/Mock, InsO, 15. Ed. (2019), Sec. 18 Sidenr. 76; Fridgen/Geiwitz/Göpfert/Fridgen/Geiwitz/Göpfert, BeckOK Insolvenzrecht, 26. Ed. (2022), Sec. 18 Sidenr. 4. The managing director should therefore always obtain a consenting resolution of the shareholders prior to filing a self application in order to avoid liability.
36The same applies to the question of whether a consenting resolution of the shareholders must be obtained prior to notification of the restructuring matter under the StaRUG.Compare Braun/Ehret, StaRUG, 1. Ed. (2021), Sec. 1 Sidenr. 10; Morgen/Gerig, StaRUG, 2. Ed. (2022), Sec. 1 Sidenr. 21. Further details are given at the appropriate place.
(ddd) Obligation to file for insolvency pursuant to Sec. 15a InsO
37Pursuant to Sec. 15a I 1 InsO, the managing director of a GmbH is obliged to file an application if insolvency and/or overindebtedness has/have occurred. Representation relationships or internal management distributions are irrelevant, each member of the management is equally obliged to file an application and cannot be exempted from this by internal agreements.Uhlenbruck/Hirte, InsO, 15. Ed. (2019), Sec. 15a Sidenr. 7 Even a shareholders' resolution does not exempt the company from the obligation to file an application. Such an instruction is irrelevant, as it conflicts with the obligation to file an insolvency petition under criminal law.
38The application must be filed without culpable delay, but no later than three weeks after the occurrence of insolvency or six weeks after the occurrence of overindebtedness. In the wake of the current energy crisis, the German parliament decided to temporarily increase the maximum period for filing an insolvency petition in the event of over-indebtedness to eight weeks, although this period may still not be exhausted if a sustainable elimination of the over-indebtedness is deemed impossible at an earlier point in time.BT-Dr. 20/4087; Amendment by the Federal Government with regard to BR-Dr. 20/2730 S. 6
This is to take into account that the planning of remediation efforts in the current situation requires more time than usual, as the situation has become even more complex.See Footnote 38 The period begins with the occurrence of insolvency or overindebtedness. Knowledge or grossly negligent ignorance on the part of the managing directors is not required for the period to commence. The occurrence of the obligation to file an application is thus not linked to any reproachable conduct on the part of the managing directors.Stürner/Eidenmüller/Schoppmeyer/Klöhn, InsO, 4. Ed. (2019), Sec. 15a Sidenr. 118; Uhlenbruck/Hirte, InsO, 15. Ed. (2019), Sec. 15a Sidenr. 14
39The time limit is not suspended by reorganization efforts, regardless of whether these are promising or not.BGH, Urt. v. 12.2.2007 – II ZR 308/05 = NJW-RR 2007, 690
40Accordingly, the managing directors have a maximum of three weeks (six weeks in the case of over-indebtedness) from the date on which the insolvency proceedings become ripe to avoid the insolvency proceedings by taking out-of-court restructuring measures while avoiding the consequences under criminal and liability law. In the event of a breach of the obligation to file an application, there is a risk of claims for damages and consequences under criminal law (see below for more details).
(eee) Liability
41In the event of a breach of the obligation to file for insolvency, there is a risk not only of criminal consequences but also, in particular, of claims for damages by creditors and the company itself.
42If the managing director violates the obligation to file an application resulting from Sec. 15a I 1 InsO, he is obliged to compensate the creditors for the resulting damages. Negligent ignorance of the obligation to file an application is sufficient to justify the obligation to pay damages.
43If the managing director does not have the personal knowledge required to check whether the company is ready for insolvency, he is obliged to seek advice immediately from a professionally qualified person if there are signs of a crisis. If, on the basis of such advice, he refrains from filing an application despite the fact that the company is actually ready for insolvency and is therefore obliged to file an application, he may not be at fault.BGH, Urt. v. 27.3.2012 – II ZR 171/10 = NZG 2012, 672
44Pursuant to Sec. 15b InsO, the managing director is obliged to reimburse payments made after the occurrence of insolvency maturity.
45The payment ban applies as soon as the obligation to file an application arises, i.e. upon the occurrence of insolvency or overindebtedness, and not only upon expiry of the three- or six-week application period. The reimbursement obligation associated with the payment ban arises irrespective of fault for each prohibited payment, so there is a high liability risk for the managing director. The managing director must therefore (also independently of the obligation under Sec. 1 StaRUG) continuously monitor the financial situation of the company in order to protect himself from liability for prohibited payments.
46Pursuant to Sec. 15b I 2 InsO, there is no duty to reimburse for payments that are consistent with the diligence of a prudent business manager. In particular, payments that serve to maintain business operations are not prohibited, provided they are made before the expiry of the three- or six-week period. Payments for services are thus not fundamentally excluded from the scope of protection of the privilege rule.BT-Dr. 19/24181, 194
47However, even such payments which are to be regarded as necessary for the maintenance of the business operations can only benefit from this privilege if, at the same time, measures are pursued with the diligence of a prudent business manager for the sustainable elimination of insolvency maturity or for the preparation of an insolvency petition. Since the liability under Sec. 15b InsO and thus the question of whether a payment is subject to the privilege under Sec. 15b I 2 InsO practically only play a role in insolvency proceedings and thus in the event of the failure of any reorganization measures, the question will arise in particular as to the extent to which these failed measures can be measures for the sustainable elimination of the maturity for insolvency which keep open the scope of protection of the liability privilege. In order to prevent any backsliding in the subsequent assessment of reorganization measures, the managing director should therefore seek qualified advice and carefully document his decision-making process.Compare dazu auch Fridgen/Geiwitz/Göpfert/Wolfer, BeckOK Insolvenzrecht, 26. Ed. (2022), Sec. 15b Sidenr. 20; Nerlich/Römermann/Mönning, InsO, 43. EL (2021), Sec. 15b Sidenr. 17
48Payments made with the consent of a provisional insolvency administrator between the filing of the petition and the opening of insolvency proceedings shall also be exempt from the payment ban.
(dd) Criminal law aspects of the crisis
49In addition to the civil law obligations and liability risks, the managing director of the GmbH also faces criminal law consequences in times of crisis, for example from Sec. 15a IV InsO, Sec. 263 StGB or Sec. 283 I No. 7b, VI StGB.Dazu vertieft Knops/Bamberger/Lieser/Lieser/Hancke, Recht der Sanierungsfinanzierung, 2. Ed. (2019), Sec 31 mwN.
(2) Restructuring outside a structured procedure
50As long as the GmbH is not insolvent or over-indebted, it can also be reorganized outside of judicial proceedings. In the event of insolvency or over-indebtedness, Sec. 19 InsO, the managing director is obliged to file an application under Sec. 15a I 1 InsO. Even promising reorganization efforts do not lead to an extension of the deadline.Schmidt/Uhlenbruck/Uhlenbruck, GmbH in Krise, Sanierung und Insolvenz, 5. Ed. (2016), Sidenr. 2.5 The managing director must therefore first check whether an out-of-court restructuring is still possible at all.
(a) General / Restructuring concept
51In order to prevent a temporary slide into material insolvency during the free reorganization, short-term measures should first be taken to temporarily secure liquidity. Possible measures include standstill agreements with banks or bridging loans from banks or shareholders.Compare Buth/Hermanns/Kraus, Restrukturierung, Sanierung, Insolvenz, 4. Ed. (2014), Sec. 4 Sidenr. 29 The disposal of non-operating assets can also help to improve liquidity in the short term.Buth/Hermanns/Kraus, Restrukturierung, Sanierung, Insolvenz, 4. Ed. (2014), Sec. 4 Sidenr. 31
52A restructuring concept must be developed from the results of a company analysis. The restructuring plan must be based on the known and recognizable facts and must clearly name and explain the measures with which sustainable restructuring is to be achieved.Thierhoff/Müller/Krumbholz, Unternehmenssanierung, 3. Ed. (2022), Chapt. 5 Sidenr. 44 Sustainable turnaround requires restructuring measures in strategic, operational and financial terms.Buth/Hermanns/Kraus, Restrukturierung, Sanierung, Insolvenz, 4. Ed. (2014), Sec. 4 Sidenr. 12
53On the basis of the restructuring concept, the company's ability to be restructured must be examined. The company is capable of being restructured if there is a sufficient probability that it will be able to generate profits again under its own steam.Müller/Winkeljohann/Axhausen, Beck’sches Handbuch der GmbH, 4. Ed. (2009), Sec. 15 Sidenr. 53 The restructuring concept serves as a decision-making basis for the creditors. If debt capital measures are required for financial restructuring - as is usually the case - the managing director must take all major creditors into account as part of an out-of-court restructuring settlement.
(b) Restructuring measures
(aa) Financial restructuring measures
54In the case of financial restructuring, a distinction must be made between internal and external financing measures.Buth/Hermanns/Kraus, Restrukturierung, Sanierung, Insolvenz, 4. Ed. (2014), Sec. 4 Sidenr. 30; Schmidt/Uhlenbruck/Uhlenbruck, GmbH in Krise, Sanierung und Insolvenz, 5. Ed. (2016), Sidenr. 2.16 Before taking external financing measures, possible measures for internal financing should be exhausted, as these can be achieved using the company's own resources and are therefore generally less bureaucratic and do not give rise to any new liabilities. Examples of internal financing measures include the reduction of working capital, the reduction of inventories and the disposal of non-operating assets.Compare Buth/Hermanns/Kraus, Restrukturierung, Sanierung, Insolvenz, 4. Ed. (2014), Sec. 4 Sidenr. 31
55In addition, it should be examined whether receivables management can be intensified.Buth/Hermanns/Kraus, Restrukturierung, Sanierung, Insolvenz, 4. Ed. (2014), Sec. 4 Sidenr. 31 In this context, it is also possible to reduce receivables through factoring. Although a discount on the value of the receivable must be expected, depending on the recoverability of the receivable, the company may save itself time-consuming collection efforts and can generate liquid funds in the short term by selling the receivable.Compare Thierhoff/Müller/Krumbholz, Unternehmenssanierung, 3. Ed. (2022), Chapt. 5 Sidenr. 116 f
(bb) Company sale
56The sale of a company as an asset deal (so-called transferring restructuring) can also be considered as a restructuring instrument outside of insolvency proceedings. In an asset deal, unlike a share deal, it is not the shares in the company that are sold, but the assets or certain parts of the assets of the company are transferred individually to the buyer. One restriction on the freedom of structuring is that the assumption of contractual relationships by the buyer requires the consent of the respective contractual partners. In addition, it must be ensured that the legal entity is sufficiently equipped to be liquidated, as there is a risk of the asset deal being contested in the event of the legal entity becoming insolvent.
(cc) Liquidation
57If the company cannot be restructured, an alternative may be the liquidation of the company and the legal entity. In this case, all assets are sold and all contractual relationships are terminated.Sec. 60 ff. GmbHG With the cessation of business operations, revenues cease. Although the discontinuation is typically also accompanied by a reduction in operating costs for materials, electricity, etc., existing contracts (e.g. personnel, rent) must be terminated in accordance with the statutory provisions and continue to be fulfilled until their termination. Against this background, careful planning of the liquidation is required.
(3) StaRUG proceedings
(a) General
58As a result of StaRUG, which came into force on January 1, 2021, debtors have been given the opportunity for the first time to implement a restructuring concept outside of insolvency proceedings against the wishes of individual creditors. According to Sec. 29 I StaRUG, the basic prerequisite for access to the stabilization and restructuring framework of StaRUG is always the threat of insolvency. However, the existence of imminent insolvency within the meaning of Sec. 18 InsO is not a prerequisite for access to the restructuring framework.Braun/Blümle/Erbe, StaRUG, 2021, vor Sec. 94 ff. Sidenr. 1 f.; Buth/Hermanns/Andres, Restrukturierung, Sanierung, Insolvenz, 5. Ed. (2022), Sec. 25 Sidenr. 195; Sonnleitner/Witfeld/Neu, Insolvenz- und Sanierungssteuerrecht, 2. Ed. (2022), Chapt. 9 Sidenr. 3; a.A. Cranshaw/Portisch, ZInsO 2020, 2561 (2576). It is disputed whether a secondary shareholder resolution is required for the notification of a restructuring project pursuant to Sec. 31 StaRUG. While the Hamburg District Court (AG Hamburg) recently affirmed this in a decisionDecision as of March 17, 2023 - 61c RES 1/23 = NZI 2023, 584. and in doing so referred to the comments of Rauhut, according to which the wording of Sec. 1 I Sentence 2 and 3 StaRUG as well as the reasoning of the law do not contain any indications that the managing directors should have the authority to give notice,NZI-Beilage 2021, 52 (54). this view can certainly be criticized. On the one hand, the notifi-cation does not have the effect of amending the Articles of Association and is still not likely to be regarded as an unusual transaction. First, the advertisement does not have the effect of amending the statute and is still unlikely to be considered an unusual transaction.Cf. Mock's comment on AG Hamburg, decision as of March 17, 2023 - 61c RES 1/23 = NZI 2023, 584 (585 ff.). The contrary view also fails to take into account the significance of Section 1 I Sentence 2 StaRUG, as this requires the management to take appropriate countermeasures against developments that could jeopardize the existence of the company. Against the background of the basically unlim-ited power of representation of the managing directors pursuant to Section 35 I Sentence 1 GmbHG, it therefore appears preferable not to require an affirmative shareholder resolution for the restructuring notification pursuant to Section 31 StaRUG. From a practical point of view, however, managing directors should obtain such a resolution for their own protection, especially since no unanimous opinion has yet been formed in case law on this issue.
(b) Restructuring plan and judicial restructuring framework
59Restructuring within the meaning of chapters 1 and 2 StaRUG shall be carried out by means of a restructuring plan drawn up by the company.S. zur konkreten Ausgestaltung die Checkliste das BMJ gem. Sec. 16 StaRUG: https://www.bmj.de/DE/Themen/FinanzenUndAnlegerschutz/Fruehwarnsysteme/checkliste.pdf;jsessionid=6C6A0A60CB7C1850218740C69C5213E1.2_cid289?__blob=publicationFile&v=3 In this context, the company can make use of various judicial instruments in a modular manner to support its restructuring efforts, or it can completely forego the involvement of the restructuring court. According to Sec. 29 II StaRUG, the instruments of the judicial stabilization and restructuring framework are judicial coordination of the plan, preliminary examination of the plan (also in the case of out-of-court coordination), stabilization (enforcement bar and liquidation bar) and confirmation of the plan. It should be noted, however, that enforcement of the plan against the will of individual creditors can only be considered in the event of judicial confirmation of the plan. The plan is adopted if at least 75% of the voting rights of each group are attributable to the adoption of the plan, Sec. 25 I StaRUG. A majority of 75% of the voting rights is not required.Braun/Herzig, StaRUG, 1. Ed. (2021) Sec. 25 Sidenr. 3; Morgen/Kowalewski/Praß, StaRUG, 2. Ed. (2022), Sec. 25 Sidenr. 33
60For the purpose of monitoring the restructuring process, the court shall appoint a restructuring officer in cases under Sec. 73 I, II StaRUG. The appointment shall be made ex officio if the rights of consumers or medium-sized, small or micro enterprises (SME = less than 250 employees and annual sales not exceeding 50 million or annual total assets not exceeding 43 million)Empfehlung der Kommission vom 6. Mai 2003 betreffend die Definition der Kleinstunternehmen sowie der kleinen und mittleren Unternehmen, AB. (EU) L 124 v. 20.04.2003, S. 36 are affected, if the company applies for a stabilization order which, with the exception of claims exempted under Sec. 4 StaRUG, is to be directed essentially against all creditors or if the restructuring plan expressly provides for monitoring of the corresponding performance to the creditors. In individual cases, the order may be dispensed with if it is not necessary or is disproportionate.
61The appointment shall also be made in accordance with paragraph 2 in cases where it is to be expected that the plan can only be implemented against the will of individual parties affected by the plan.
(c) Restructuring moderation, Sec. 94 to 100 StaRUG
62Even before the occurrence of imminent insolvency, the Company may file an application for the appointment of an independent reorganization facilitator.Braun/Blümle/Erbe, StaRUG, 2021, vor Sec. 94 ff. Sidenr. 1 f.; Buth/Hermanns/Andres, Restrukturierung, Sanierung, Insolvenz, 5. Ed. (2022), Sec. 25 Sidenr. 195; Sonnleitner/Witfeld/Neu, Insolvenz- und Sanierungssteuerrecht, 2. Ed. (2022), Chapt. 9 Sidenr. 3; a.A. Cranshaw/Portisch, ZInsO 2020, 2561 (2576).
63The restructuring facilitator, who is experienced in restructuring, acts as a neutral mediator in the out-of-court restructuring settlement negotiations. The purpose of his appointment is that, as an experienced moderator and independent authority, he moderates the mutual interests of the parties involved so that all are prepared to conclude an out-of-court settlement.Morgen/Ziegenhagen, StaRUG, 2. Ed. (2022), Sec. 94 Sidenr. 2 The Company can also have the negotiated settlement confirmed by the court. Pursuant to Sec. 97 III, 90 StaRUG, this means that the measures resolved in the settlement can only be challenged to a limited extent in subsequent insolvency proceedings.
(d) Practical example: Restructuring of a holding company
64The StaRUG offers advantages above all when the focus is on financial restructuring. In parallel with financial restructuring under the StaRUG, performance restructuring can also be carried out. However, this then follows general rules. In the example, a holding company with 4 subsidiaries was restructured (see chart below).
Figure 3: Representation of the holding structure with example values to illustrate the
need for restructuring
65The cause of the crisis at the holding company level was that one investment got into serious difficulties - to the point of insolvency. The losses incurred could not be absorbed by the other investments and, via the holding company, threatened to jeopardize them as well. As the holding company was liable for significant parts of the liabilities of the insolvent unit, there was a need for financial restructuring at the level of the holding company to prevent the other investments from being "infected". It was not necessary to restructure contractual relationships in terms of performance or to take any personnel measures in the other units.
66With the help of a management consultant, the holding company drew up a financial plan consisting of earnings and liquidity planning, as well as a draft restructuring plan, and then filed the restructuring case with the restructuring court.
67Since small creditors (consumers or SMEs) were also affected, a restructuring officer was appointed by the court pursuant to Sec. 73 StaRUG. During the negotiations on the restructuring plan, the main problem was the applicability of the rules on the tax treatment of the restructuring profit. The waiver by the creditors in the restructuring plan resulted in a book profit, which is in principle taxable and whose tax treatment first had to be clarified. After lengthy discussions with the responsible tax authorities, it was clarified that the requirements under Sec. 3a EStG, 7b GewStG, 7 I, 8 I, II KStG were met, even if a performance-based restructuring in the StaRUG did not take place. This was based primarily on considerations of European law.
68After the plan was accepted by the affected parties, the plan was confirmed by the court pursuant to Sec. 63 IV StaRUG. The plan quota was paid out.
(4) Debtor-in-possession-management, Sec. 270 ff. InsO
(a) General, Aim of debtor-in-possession-management
69The prerequisite for access to debtor-in-possession-management proceedings is the existence of a reason for insolvency (for more information on the reasons for insolvency).
70The objective of the proceedings is basically the self-organization of the legal entity.Braun/Riggert, InsO, 9. Ed. (2022), Sec. 270 Sidenr. 1 Even if this is the primary objective, all other ways of improving the position of creditors remain permissible, since the restructuring of the legal entity must not be at the expense of the creditors.BT-Dr. 19/24181, 204; Fridgen/Geiwitz/Göpfert/Ellers, BeckOK Insolvenzrecht, 26. Ed. (2022), Sec. 270 Sidenr. 4 Thus, if the creditors would be worse off with a reorganization of the legal entity than without, the implementation of such a reorganization is ruled out.
71If the company is already insolvent or over-indebted, it has no other option than to enter into insolvency proceedings (with regard to liability and criminal law aspects). However, in deviation from the principle of Sec. 80 I InsO, which regulates the transfer of the right of administration and disposal to the insolvency administrator (more closely related to third-party administration), the company retains the possibility of disposing of the assets itself. This, in turn, is the central advantage of debtor-in-possession-management compared to regular insolvency proceedings.Thierhoff/Müller/Oberle, Unternehmenssanierung, 3. Ed. (2022), Chapt. 10 Sidenr. 97 By retaining the power of disposal, the loss of reputation typically associated with an insolvency petition can be mitigated, as the company itself can maintain and shape business relationships with suppliers and customers instead of having to hand over this task to an insolvency administrator. The order for debtor-in-possession-management is subject to strict conditions, the fulfillment of which means that the company must first demonstrate that it is "worthy” of debtor-in-possession-management at all.Compare Braun/Riggert, InsO, 9. Ed. (2022), Sec. 270 Sidenr. 2
72The application for debtor-in-possession-management can be filed by the company itself or by a creditor. In the case of a GmbH, the managing directors are entitled to file an application in accordance with Sec. 15 I 1 InsO (and are even obliged to do so in accordance with Sec. 15a InsO). If the GmbH is without a managing director, the body which has the authority to appoint a managing director and thus bears the responsibility for eliminating the lack of management is entitled and obliged to do so.
73Authorized signatories are per se not entitled to file an application.Uhlenbruck/Wegener, InsO, 15. Ed. (2019), Sec. 13 Sidenr. 73 The application cannot be made subject to a condition or limited in time.Braun/Sorg, InsO, 9. Ed. (2022), Sec. 13 Sidenr. 9; Stürner/Eidenmüller/Schoppmeyer/Vuia, InsO, 4. Ed. (2019), Sec. 13 Sidenr. 72
74The application must be addressed to the competent insolvency court. Pursuant to Sec. 2 InsO, subject-matter jurisdiction lies with the local courts in whose district a regional court has its seat. However, the federal states may make different arrangements from this.
(b) Preliminary debtor-in-possession-management
75If the requirements are met, the court orders provisional debtor-in-possession-management for the period until proceedings are opened. In this way, the company avoids the appointment of a preliminary insolvency administrator and can thus retain the greatest possible control over the proceedings from the outset.
76The appointment of a provisional insolvency monitor takes place with the order of provisional debtor-in-possession-management, Sec. 270b I InsO. The insolvency monitor must be independent of the debtor and the creditors in accordance with Sec. 56 I InsO. In practice, the provisional insolvency monitor is often also appointed as insolvency monitor in the opened proceedings.
77The insolvency court terminates self-administration ex officio if the company seriously breaches its obligations under insolvency law, fails to remedy remediable deficiencies in the debtor-in-possession-management plan within the rectification period or if the achievement of the self-administration objective set proves to be futile. In order to prevent a revocation due to failure to achieve the objective of the proceedings, the debtor company should devote the greatest care to the presentation of the objective of the proceedings.Thierhoff/Müller/Oberle, Unternehmenssanierung, 3. Ed. (2022), Chapt. 10 Sidenr. 14 After the cancellation, the procedure is continued as a third-party administrative procedure.Thierhoff/Müller/Oberle, Unternehmenssanierung, 3. Ed. (2022), Chapt. 10 Sidenr. 113; Stürner/Eidenmüller/Schoppmeyer/Kern, InsO, 4. Ed. (2019), Sec. 272 Sidenr. 68
(c) Debtor-in-possession-management in opened proceedings
(aa) Requirements for the order of debtor-in-possession-management
78In the event of a prior order of provisional debtor-in-possession-management, the court shall examine at that point whether the prerequisites for this continue to exist. Pursuant to Sec. 270f I InsO, the ordering of debtor-in-possession-management also depends on whether there are facts on the basis of which the provisional debtor-in-possession-management would have to be revoked pursuant to Sec. 270e InsO..
(bb) Legal status of the insolvency monitor
79The insolvency monitor is obliged to supervise the company in the exercise of its administrative and disposal powers pursuant to Sec. 275 et seq. InsO, Sec. 274 II InsO, to supervise the company in the exercise of its administrative and disposal powers.
80If ordered, the insolvency monitor shall assist the company pursuant to Sec. 274 II 2 InsO in the pre-financing of insolvency benefits, accounting under insolvency law and negotiations with customers and suppliers. Pursuant to Sec. 274 III InsO, the insolvency monitor shall inform the insolvency court and the creditors' committee of any circumstances which indicate that the continuation of debtor-in-possession-management will lead to disadvantages for the creditors.
81Pursuant to Sec. 275 I InsO, the company shall enter into liabilities only with the consent of the insolvency monitor or in agreement with the insolvency monitor.
82The company may not enter into liabilities that are part of the debtor's ordinary business operations if the insolvency monitor objects beforehand. Although the company is not required to obtain consentStürner/Eidenmüller/Schoppmeyer/Kern, InsO, 4. Ed. (2019), Sec. 275 Sidenr. 9; a.A. Uhlenbruck/Zipperer, InsO, 15. Ed. (2019), Sec. 275 Sidenr. 4 , it must nevertheless inform the insolvency monitor so that the latter has the opportunity to exercise his right of objection appropriately.Stürner/Eidenmüller/Schoppmeyer/Kern, InsO, 4. Ed. (2019), Sec. 275 Sidenr. 13; Uhlenbruck/Zipperer, InsO, 15. Ed. (2019), Sec. 275 Sidenr. 4 Prior agreement on the scope of the duty to provide information is imperative, as this is the only way to prevent a constant need for new coordination between the company and the insolvency monitor, which would disrupt ongoing business operations.Stürner/Eidenmüller/Schoppmeyer/Kern, InsO, 4. Ed. (2019), Sec. 275 Sidenr. 13; Fridgen/Geiwitz/Göpfert/Plaßmaier/Ellers, BeckOK Insolvenzrecht, 26. Ed. (2022), Sec. 275 Sidenr. 11
83Liabilities outside the ordinary course of business, on the other hand, shall only be entered into with the prior consent of the insolvency monitor.Uhlenbruck/Zipperer, InsO, 15. Ed. (2019), Sec. 275 Sidenr. 4; Fridgen/Geiwitz/Göpfert/Plaßmeier/Ellers, BeckOK Insolvenzrecht, 26. Ed. (2022), Sec. 275 Sidenr. 8; Stürner/Eidenmüller/Schoppmeyer/Kern, InsO, 4. Ed. (2019), Sec. 275 Sidenr. 15
(cc) Repeal
84The termination of debtor-in-possession-management is subject to the requirements of Sec. 272 InsO. It shall take place ex officio in the event of a serious breach of duty or hopelessness (in this respect, the statements made above in respect of Sec. 270e InsO shall apply mutatis mutandis). Cancellation shall also take place upon application pursuant to Sec. 272 I Nos. 3 to 5 InsO..
(5) Protective Shield Proceedings
(a) Norm Purpose
85The protective shield proceedings pursuant to Sec. 270d InsO are a special variant of provisional debtor-in-possession-management.Thierhoff/Müller/Oberle, Unternehmenssanierung, 3. Ed. (2022), Chapt. 10 Sidenr. 116; Fridgen/Geiwitz/Göpfert/Ellers, BeckOK Insolvenzrecht, 26. Ed. (2022), Sec. 270d Sidenr. 1 The aim of this constellation of proceedings is to enable the company to draw up a restructuring plan under the supervision of a provisional insolvency monitor within a period determined by the court, without having to fear enforcement by its creditors in the meantime. As in the case of provisional debtor-in-possession-management, the company is not subject to the restrictions on its right of administration and disposal following the appointment of a provisional insolvency administrator, but can exercise this right itself within the limits described above ().BT-Dr. 17/5712, 40
86The protective shield proceedings offer advantages compared to provisional debtor-in-possession-management, but are also subject to stricter requirements.
87Provided that the company comprehensively fulfills the requirements, it has a bound claim to the order of the requested protective shield proceedings pursuant to Sec. 270d I 1 In-sO. The court then sets a maximum three-month deadline for the submission of an insolvency plan. Although this does not oblige the Company to submit an insolvency plan.Braun/Riggert, InsO, 9. Ed. (2022), Sec. 270d Sidenr. 13; Fridgen/Geiwitz/Göpfert/Ellers, BeckOK Insolvenzrecht, 26. Ed. (2022), Sec. 270d Sidenr. 59
88In order to ensure the success of the reorganization, the Company may apply for protective measures under Sec. 270c III, 21 I, II 1 No. 1a, 3 to 5 InsO. The protective shield essentially consists in the fact that the company has a bound claim under Sec. 270d III InsO that the insolvency court, upon its application, prohibits compulsory execution against the company's movable assets during the set period.[Compare Fridgen/Geiwitz/Göpfert/Ellers, BeckOK Insolvenzrecht, 26. Ed. (2022), Sec. 270d Sidenr. 4
89With regard to the provisional insolvency monitor, the comments on temporary debtor-in-possession-management apply accordingly.
90However, a significant advantage over debtor-in-possession-management continues to be the right of the company to propose the person of the insolvency monitor under Sec. 270d II 2 InsO.Compare Fridgen/Geiwitz/Göpfert/Ellers, BeckOK Insolvenzrecht, 26. Ed. (2022), Sec. 270d Sidenr. 7; Thierhoff/Müller/Oberle, Unternehmenssanierung, 3. Ed. (2022), Chapt. 10 Sidenr. 120 Pursuant to Sec. 270d II 3 InsO, the court is bound by this proposal to the greatest possible extent. It may only deviate from it if the proposed person is obviously unsuitable.
(b) Practical example: Restructuring of a sales company of a globally operating wine wholesale company
91A globally active wine wholesaler with its own vineyard and winery, whose roots go back to the 17th century, was struggling with economic problems for the first time in the mid-1990s. The main reasons for this were the intensification of competition in terms of direct sales to end customers, the aging of existing customers and growing pension claims. The resulting deficits for the company, which was part of a holding company, were initially offset by income from its own subsidiaries and capital measures taken by the parent company. However, the losses could not be sustained in the long term, so that the sales company decided to file an application for the opening of insolvency proceedings in self-administration within the framework of protective shield proceedings within the meaning of Sec. 270a, 270d InsO.
92In parallel, a new managing director with experience in sales was appointed and the proceedings were accompanied by a Chief Restructuring Officer (CRO) experienced in insolvency and restructuring proceedings. A provisional creditors' committee was formed. Initial restructuring measures were initiated and the sales organization was strengthened in order to achieve the goal of no longer generating operating losses as of the opening of the proceedings. To ensure this, personnel measures were taken in accordance with Sec. 123 et seq. InsO, as a result of which 50 employees were made redundant. In addition, the sales organization was realigned by terminating superfluous sales offices, streamlining the network of sales representatives and terminating long-term debt relationships. At the same time, negotiations were held with the Pension Protection Association (PSVaG). In return for an improvement in the plan the PSV took over the pension claims so that the Company was permanently relieved of this obligation.
93The implementation of a dual-track procedure was discussed with the creditors' committee. In the end, however, it was decided against this, as the administration was essentially carried out via the parent company, but not via the insolvent sales company, and, with the exception of the sales team, no assets were held by the sales company. In addition, all trademark rights were owned by the parent company. All of this spoke against the saleability of the unit.
94The shareholder had agreed to make an appropriate plan contribution to secure the quota.
(6) Regular procedure (third-party management)
(a) General
95Even if debtor-in-possession-management appears at first glance to be the more attractive procedure, the standard procedure is in no way inferior to it, with the exception of a few points. The standard procedure also allows the company to be restructured and does not necessarily lead to liquidation..
(b) Insolvency opening proceedings
(aa) Insolvency filing
96Pursuant to Sec. 13 I 1 InsO, the proceedings shall only be opened upon application, be it an own The managing director shall be obligated pursuant to Sec. 20 I 1, 101 I 1 InsO to provide the required information and to submit the relevant documents even beyond the application.Thierhoff/Müller/Roth, Unternehmenssanierung, 3. Ed. (2022), Chapt. 10 Sidenr. 53 In addition, according to Sec. 20 I 2, 97 I 2 InsO, he is also obliged to disclose facts which are suitable to establish criminal liability against him. According to Sec. 97 I 3 InsO, these may not be used against him in subsequent criminal proceedings without his consent. The managing director may be obliged to make an affirmation in lieu of oath, may be compulsorily summoned and, in extreme cases, may even be imprisoned in the event of serious violations of the duty to disclose and cooperate, Sec. 20 I 2, 98 InsO.
If the relevant requirements are met (in particular: grounds for insolvency and sufficient insolvency assets), the court shall open the insolvency proceedings by way of an order. If debtor-in-possession-management has not been applied for or if the requirements for it are not met, the court appoints an insolvency administrator, Sec. 27 I InsO. The court shall request the creditors to file their claims with the insolvency administrator within a certain period and to notify him of the security interests claimed in the debtor's property and rights, Sec. 28 InsO.
(bb) Provisional insolvency administration
97Depending on the case, a certain amount of time elapses between the filing of the application and the opening of proceedings. If business operations are ongoing, decisions must also be made during this phase. In order to ensure the protection of the future insolvency estate during the opening proceedings, provisional insolvency administration has become established in the standard proceedings.
98According to Sec. 22 III InsO, the preliminary insolvency administrator is entitled to enter the business premises of the company and to inspect the books and other business documents. In addition, a reservation of consent under Sec. 21 II 1 No. 2 Alt. 2 InsO or, more rarely, a general prohibition of disposal pursuant to Sec. 21 II 1 No. 2 Alt. 1 InsO is ordered.
(aaa) Preliminary insolvency administrator
99If a reservation of consent is ordered pursuant to Sec. 21 II 1 No. 2 Alt. 2 InsO is referred to as a common preliminary insolvency administrator, as his powers are significantly less extensive than in the case of an order for a general prohibition of disposal pursuant to Sec. 21 II 1 No. 2 Alt. 1 InsO. The company may only make dispositions with the consent of the preliminary insolvency administrator, whereby the reservation of consent can also be limited to certain dispositions.Uhlenbruck/Vallender, InsO, 15. Ed. (2019), Sec. 21 Sidenr. 24 By their very nature, commitment transactions are not covered by this. The Company may continue to enter into such transactions without the involvement of the preliminary insolvency administrator.BGH, Urt. v. 21.2.2013 – IX ZR 69/12 = NZI 2013, 434 Consent pursuant to Sec. 21 II 1 No. 2 Alt. 2 InsO means not only prior consent within the meaning of Sec. 183 1, 182 BGB but also subsequent approval within the meaning of Sec. 184 I, 182 BGB.Uhlenbruck/Vallender, InsO, 15. Ed. (2019), Sec. 21 Sidenr. 24; Stürner/Eidenmüller/Schoppmeyer/Haarmeyer/Schidt, InsO, 4. Ed. (2019), Sec. 21 Sidenr. 65 Dispositions made by the company without the prior consent of the provisional insolvency administrator are pendingly invalid under Sec. 185 II BGB until subsequent approval. This form of provisional insolvency administration has become established as the rule in practice, as it is less drastic than the imposition of a general prohibition on disposals.Compare Uhlenbruck/Vallender, InsO, 15. Ed. (2019), Sec. 21 Sidenr. 24
(bbb) Strong preliminary insolvency administrator
100If a general prohibition of disposal is imposed on the company pursuant to Sec. 21 II 1 No. 2 Alt. 1 InsO, one speaks of a so-called strong preliminary insolvency administrator, since the power of administration and disposal of the company's assets is transferred in full to the preliminary insolvency administrator pursuant to Sec. 22 I 1 InsO. In practice, this form of provisional administration is the exception.
(dd) Other provisional measures
101In order to prevent a further deterioration in the financial situation of the company during the opening proceedings, the court may take further provisional protective measures in accordance with Sec. 21 II 1 InsO to protect the creditors. These include the convening of a preliminary creditors' committee, the ordering of an execution freeze or a prohibition of realization and confiscation and the imposition of a postal freeze.
(ee) Insolvency allowance
102Wage arrears from the last three months prior to commencement of insolvency proceedings shall be settled by the Federal Employment Agency pursuant to Sec. 165 SGB III. The wage claims are ipso iure transferred to the Federal Employment Agency in accordance with Sec. 169 SGB III and can be filed as insolvency claims in accordance with Sec. 55 III 1 InsO. Insolvency benefits are not paid out until the insolvency proceedings have been opened. In order to prevent an exodus of important employees already during the opening proceedings, the insolvency money can be financed in advance if the prognosis for continuation is positive.Buth/Hermanns/Saegon, Restrukturierung, Sanierung, Insolvenz, 4. Ed. (2014), Sec. 24 Sidenr. 22 The bank providing the advance financing can be secured by advance assignment of the insolvency benefit claims arising when the proceedings are opened. Pursuant to Sec. 170 IV SGB III, advance financing requires the approval of the Federal Employment Agency and must therefore always be carried out in close coordination with the latter.
(c) The person of the insolvency administrator
103The insolvency administrator is entrusted with the administration and liquidation of the insolvency estate in accordance with Sec. 80 et seq. InsO, the insolvency administrator is entrusted with the administration and liquidation of the insolvency estate and is obliged to protect the interests of the creditors in accordance with Sec. 1 InsO. The appointment is made by the insolvency court. If the preliminary insolvency administration has been ordered, the person of the preliminary insolvency administrator is generally also appointed as the insolvency administrator. If a preliminary creditors' committee has been set up, it is given the opportunity to comment pursuant to Sec. 56a I InsO. According to Sec. 56a II 1 InsO, the court may only deviate from the unanimous proposals of the preliminary creditors' committee if the proposed person is not suitable. At the first creditors' meeting following the appointment of the administrator, the creditors may elect another person as insolvency administrator. The administrator receives a standard remuneration based on the value of the assets administered, Sec. 63 I 2 InsO.
(d) Effects of the opening of proceedings
(aa) General effects
104In the case of a GmbH, the opening of insolvency proceedings constitutes a reason for dissolution pursuant to Sec. 60 I No. 4 GmbHG, which is also entered in the Commercial Register. The registered dissolution does not yet lead to the deletion of the company.
105With the opening of insolvency proceedings, the right of administration and disposal of the insolvency estate passes to the insolvency administrator pursuant to Sec. 80 I InsO. Dispositions of the company after the opening of insolvency proceedings are ineffective according to Sec. 81 I 1 InsO.
106Court proceedings, insofar as they concern the insolvency estate, are interrupted by the opening of proceedings pursuant to Sec. 240 ZPO and may be commenced by the insolvency administrator or, in the cases of Sec. 86 InsO, by the opponent in accordance with Sec. 85, 86 InsO.
107Pursuant to Sec. 87 InsO, the insolvency creditors may only pursue their claims in accordance with the provisions of the Insolvency Code. The securities obtained by enforcement measures from the period from one month before the filing of the petition until the opening of the insolvency proceedings become retroactively ineffective upon the opening of the insolvency proceedings pursuant to Sec. 88 I InsO (so-called non-return bar). Satisfactions already obtained are not affected by this.Braun/Kroth, InsO, 9. Ed. (2022), Sec. 88 Sidenr. 5 Both civil law and administrative law enforcement measures fall under this setback barrier.Braun/Kroth, InsO, 9. Ed. (2022), Sec. 88 Sidenr. 1; Stürner/Eidenmüller/Schoppmeyer/Breuer/Flöther, InsO, 4. Ed. (2019), Sec. 88 Sidenr. 13 During the insolvency proceedings, all individual enforcement measures against the Company's assets are prohibited under Sec. 89 I InsO and are invalid if they are carried out in violation of this prohibition.
(bb) Existing legal transactions
108With regard to existing mutual contracts which have not yet been completely fulfilled by both parties at the opening of proceedings, the insolvency administrator may in principle choose whether to fulfill them or not, pursuant to Sec. 103 I InsO. If he decides in favor of performance, he must effect the performance owed from the assets of the insolvency estate and may in return draw the performance owed by the creditor from the assets of the insolvency estate. If he waives performance, no further exchange of performance takes place. For certain legal transactions, Sec. 104 et seq. InsO contain special provisions.Compare Buth/Hermanns/Saegon, Restrukturierung, Sanierung, Insolvenz, 4. Ed. (2014), Sec. 24 Sidenr. 63
(cc) Insolvency avoidance
109The instrument of avoidance in insolvency enables the insolvency administrator to reverse asset transfers that have led to a reduction of the future insolvency estate prior to the opening of proceedings and thus to a disadvantage of the creditors as a whole after the opening of insolvency proceedings.Compare BT-Dr. 12/2443, 156 By reversing the satisfaction of individual preferred creditors and drawing the displaced assets back to the insolvency estate, the goal of equal satisfaction of all creditors can be enforced by the insolvency administrator.
(dd) Administration and liquidation of the insolvency estate
110After the opening of insolvency proceedings, the insolvency administrator takes possession of and administers the assets pursuant to Sec. 148 I InsO. The further progress of the proceedings is largely determined by the creditors, since according to Sec. 157 S. 1 InsO they decide in the creditors' meeting whether the company's operations are to be shut down or continued. They can also instruct the insolvency administrator to draw up an insolvency plan in accordance with Sec. 157 S. 2 InsO. If no insolvency plan is drawn up or if the creditors are in favor of liquidation of the company, the assets belonging to the estate shall be liquidated by the insolvency administrator in accordance with Sec. 159 InsO.Compare Buth/Hermanns/Saegon, Restrukturierung, Sanierung, Insolvenz, 4. Ed. (2014), Sec. 24 Sidenr. 57
111The final distribution takes place in accordance with Sec. 196 I InsO after completion of the liquidation. The creditors are taken into account in accordance with their established claims. Subordinated creditors are only taken into account after complete satisfaction of the other creditors. Any remaining surplus is to be distributed to the shareholders pursuant to Sec. 199 S. 2 InsO.
(e) Costs of the insolvency proceedings
112Pursuant to Sec. 54 of the Insolvency Code, the costs of the insolvency proceedings shall consist of the court costs and the remuneration of the preliminary insolvency administrator, the insolvency administrator and the members of the creditors' committee.
(f) Insolvency plan
(aa) General
113Sec. 1 S. 2 Alt. 2 InsO offers the possibility of restructuring the legal entity by means of an insolvency plan as an alternative to liquidation of the assets. The aim is usually the continuation of the company. In addition to the reorganization of the company, the objectives of the plan proceedings may also include forms of liquidation and procedures that deviate from the standard procedure.Braun/Frank, InsO, 9. Ed. (2022), Sec. 217 Sidenr. 1; Uhlenbruck/Lüer/Streit, InsO, 15. Ed. (2019), Sec. 217 Sidenr. 1
(bb) Submission authorization
114According to Sec. 218 I 1 InsO, the insolvency administrator and the company itself are entitled to submit an insolvency plan.
(cc) Components of the insolvency plan
115Pursuant to Sec. 219 InsO, the insolvency plan consists of the representative part, the formative part and the annexes pursuant to Sec. 229 seq. InsO.
116The representative part describes the nature of the measures taken after the opening of proceedings and those which are still to be taken. It also contains information on the basis and effects of the plan, which are relevant for the consenting parties with regard to their decision on possible consent to the plan and its confirmation by the court. In addition, the effects of the plan on the creditors' prospects of satisfaction (composition account) must be explained.
117The formative part pursuant to Sec. 221 InsO is considered the "execution part", as it contains all the provisions on how the legal position of the parties is to be changed by the plan. This includes, first and foremost, the waiver of the part of the creditors' claims exceeding the quota.Braun/Frank, InsO, 9. Ed. (2022), Sec. 221 Sidenr. 15
(dd) Voting procedure
118The insolvency court shall first conduct a preliminary examination pursuant to Sec. 231 InsO.Nerlich/Römermann/Ober, InsO, 43. EL (2021), Sec. 231 Sidenr. 1; Schmidt/Thies, InsO,7. Ed. (2018), Sec. 231 Sidenr. 1 If there is no rejection within the meaning of Sec. 231 InsO, the insolvency court shall set a date in accordance with Sec. 235 I 1 InsO for a discussion of the insolvency plan and the voting rights of the parties involved, and a subsequent vote on the plan (discussion and voting date).
119The prohibition of obstruction pursuant to Sec. 245 InsO allows the plan to be implemented against the will of individual voting groups previously formed, provided that they would not be worse off as a result than in the normal proceedings.
(ee) Confirmation of the insolvency plan
120In order to protect the parties to the proceedings, Sec. 248 I InsO requires confirmation by the insolvency court of an insolvency plan accepted by the parties to the proceedings in order to ensure that only one plan becomes effective pursuant to Sec. 254 et seq. InsO (), which has come about in an orderly manner and whose content complies with the statutory requirements.Braun/Frank, InsO, 9. Ed. (2022), Sec. 248 Sidenr. 1
(ff) Legal effects of the insolvency plan
121With the legally binding confirmation decision by the insolvency court pursuant to Sec. 248 InsO, the provisions set forth in the constructive part pursuant to Sec. 254 I InsO become effective for and against all parties involved and, subject to Sec. 255 f. InsO, are final. InsO final.Fridgen/Geiwitz/Göpfert/Freund/Stadler, BeckOK Insolvenzrecht, 26. Ed. (2022),Sec. 254 Sidenr. 2
(gg) Tax treatment of reorganization profits in insolvency plan proceedings
122According to Sec. 3a II EStG, a company-related reorganization exists "if the taxpayer proves the need for reorganization and the ability to reorganize the company, the suitability for reorganization of the business-related debt forgiveness and the intention of the creditors to reorganize at the time of the debt forgiveness". According to Sec. 3a I 1 EStG, restructuring profits (or income) are increases in business assets as well as business income from the cancellation of debts for the purpose of restructuring. According to Sec. 3a I 1 EStG, these are tax-free in total.Roth, Insolvenzsteuerrecht, 3. Ed. (2021), Sidenr. 4.22
123Beneficiaries within the meaning of Sec. 3a I 1 Alt. 2 EStG, only business-related debt cancellations are eligible, i.e. both privately-related debt cancellations and the cancellation of liabilities due to confusion are not covered by this.Roth, Insolvenzsteuerrecht, 3. Ed. (2021), Sidenr. 4.22 However, this does include income generated from a debt-equity swap and, under certain conditions, book profits generated by subordination.Brandis/Heuermann/Krumm, EStG, 160. EL (2021), Sec. 3a Sidenr. 20; Eilers/Schwahn, Sanierungssteuerrecht, 2. Ed. (2020), Sidenr. 2.42 f. The same applies under Sec. 3a V EStG to increases in assets due to a discharge of residual debt.
124Sec. 3a EStG is also relevant for the tax treatment under trade tax pursuant to Sec. 7b GewStG. The same applies to corporate income tax under Sec. 7 I, 8 I-II KStG.Roth, Insolvenzsteuerrecht, 3. Ed. (2021), Chapt. 4 Sidenr. 309
(g) Practical example of an asset deal: Transferring the reorganization of a specialty mechanical engineering company
125An international engineering company had accumulated substantial operating losses. As a result of the crisis, internal problems of the company became apparent, namely incomplete recording of customer orders, incorrect calculations, no or inadequate post-calculations, poor internal communication and a lack of leadership competence at management level. Initially, there was a management crisis, the consequences of which escalated into a liquidity crisis. Despite out-of-court restructuring measures, insolvency proceedings had to be filed.
126Due to the long lead times, the insolvency money effect alone could not ensure liquidity in the proceedings, so that a genuine mass loan became necessary. With the approval of the provisional creditors' committee, such a loan was taken out with a local bank. This made it possible to pay suppliers, some of whom were also prepared to deliver against a cost commitment, and to complete the orders.
127At the same time, a sales process was initiated. Initially, a regional competitor was interested in the company and wanted to acquire it within the framework of a transferring reorganization. However, due to family issues, the sale fell through shortly before completion. Negotiations continued with three interested parties. As a result, a transferring reorganization to a German investment company was realized. The real estate, the name (company), the entire fixtures and fittings, as well as the shareholding in the debtor's US subsidiary were acquired. As this was a transfer of business under Sec. 613a of the German Civil Code, the employees were transferred by operation of law.
(h) Practical example of an insolvency plan: Restructuring of a spa company
128A company in a spa town, which had about 50 properties with a size of about 77,000 m², generated its income from the operation of a senior citizens' residence and a medical fitness studio, from renting and leasing as well as from energy production.
129From the 1990s at the latest, structural problems arose, as changes in the health care system were followed by a drop in sales, mainly driven by the discontinuation of full funding for health cures. Financial difficulties were eliminated by the successive sale of properties. However, no strategic realignment took place. Therefore, the management board was finally forced to file for insolvency.
130Business operations were continued in full during the application process and after the opening of insolvency proceedings. At the same time, a restructuring concept was drawn up in consultation with the creditors' committee and with the involvement of the main contractual partners, which was implemented as part of an insolvency plan. Among other things, the business areas were restructured, unprofitable areas were closed, a new sales and marketing structure was established, and a personnel concept was drawn up and implemented.
131The insolvency plan included a capital reduction to zero and a simultaneous capital increase in order to attract new investors who would provide the company with the capital required for sustainable consolidation. As a result, the business operations of the company and the legal entity itself were preserved and restructured.
Information for legal professionals
1) General
A. General information
132The limited liability company (GmbH) is a commercial company with a corporate organization and its own legal personality, which has a share capital determined in its articles of association (§§ 5, 5a GmbHG), which corresponds to the sum of the contributions to be made by the shareholders on the shares.Noack/Servatius/Haas/Fastrich, GmbHG, 23. Ed. (2022), Intr. Sidenr. 1
133A subform of the GmbH is the Unternehmergesellschaft (haftungsbeschränkt), or UG for short (
134According to
135In addition, it is a corporation, thus independent of the existence of its members and has an independent organization with independent bodies.Fleischer/Goette/Merkt, GmbHG, 4. Ed. (2022),
136The GmbH is a capital company, i.e. it requires a firmly bound company fortune in the form of the capital stock, in which each partner takes part and which is to be received.Bork/Schäfer/Schäfer, GmbHG, 4. Ed. (2019), Intr. Sidenr. 2 (our section as an appendix)
137In addition, the GmbH is always a commercial company, irrespective of its statutory corporate purpose, and is therefore a formal merchant in accordance with
138From the designation of the company form arises the aspect of the limitation of liability for liabilities of the company to the company assets (
139In practice, the GmbH has proven to be an attractive legal form for companies of all sizes, as it offers a limitation of liability for a significantly lower minimum capital (compared to the stock corporation)Bzw. im Falle der UG (haftungsbeschränkt) kein Mindestkapital
and the administrative expense is also significantly lower compared to the stock corporation.Heckschen/Herrler/Münch/Heckschen, Beck’sches Notarhandbuch, 7. Ed. (2019),
B. Legally permissible purpose
140
141The GmbH can be commercially active, but is not obligated to do so and can therefore also function, for example, as a pure asset management company without its own business operations.Bartl/Bartl/Beine/Koch/Schlarb/Schmitt/H. Bartl, GmbH-Recht, 8. Ed. (2019),
142Compared to other legal systems, such as Anglo-American corporate law,Säcker/Rixecker/Oetker/Limperg/Kindler, BGB, Int. Hand. U. GesR Sidenr. 548; Historisch auch im englischen Recht, hierzu vgl. Lembeck, NZG 2003, 956 (964).
a business purpose that deviates from the corporate purpose has no effect on external liability (i.e. no ultra vires principle).Scholz/Bitter, GmbHG, 12. Ed. (2018 ff.),
C. Shareholders
I. Characteristics
143According to the wording of
1. Natural persons
144In principle, natural persons are not subject to any restrictions with regard to their ability to form and participate in a company.
145In the case of persons with limited legal capacity within the meaning of §
146With regard to the formation and participation of two spouses or life partners, only restrictions under property law must be observed.Fleischer/Goette/Fleischer, GmbHG, 4. Ed. (2022),
147It is possible for sole traders to be shareholders or founders of a GmbH under their civil name as well as under their company name.Noack/Servatius/Haas/Servatius, GmbHG, 23. Ed. (2022),
148Natural persons who are neither German nationals nor have a domicile or habitual residence in the area of application of the GmbHG can in principle also act without restriction as shareholders and founders of a GmbH. Special features apply at most with regard to restrictions of labor law or specific requirements for the person of the managing director (reference to
2. Legal entities
149Legal entities may act as shareholders and founders of a limited liability company without restriction.Scholz/Cramer, GmbHG, 12. Ed. (2018 ff.),
3. Partnerships
150For partnerships under German law (e.g. OHG, KG), the same applies as for legal entities (reference to section).Fleischer/Goette/Fleischer, GmbHG, 4. Ed. (2022),
151The GbR iSd §
4. Communities of joint ownership according to the BGB
152Joint ownership communities within the meaning of the BGB (e.g. associations without legal capacity, communities of heirs, etc.) can become shareholders of a GmbH.Scholz/Cramer, GmbHG, 12. Ed. (2018 ff.),
II. Other personal requirements
153Further requirements for the shareholders that go beyond the legal requirements can be stipulated in the articles of association.Bork/Schäfer/Schäfer, GmbHG, 4. Ed. (2019),
III. Number of shareholders and straw man formation
154
155From the point of view of corporate law, the (indirect) representation by a "straw man" is basically unobjectionable.O. Fußn. 34
However, case law sees an obligation to explain this representation relationship in cases in which the transfer of a company share within the meaning of
Content On insolvency law
(1) Introduction
(a) The term „crisis“ and phases of a crisis
(aa) Business crisis
(aaa) Stakeholder Crisis
(bbb) Strategic crisis
(ccc) Product and sales crisis
(ddd) Profitability crisis
(eee) Liquidity crisis
(bb) Crisis in the legal sense
(cc) Insolvency as the climax of the crisis development
(aaa) Insolvency, Sec. 17 InsO
Facts constituting insolvency
Presumption pursuant to Sec. 17 II 2 InsO
(bbb) Imminent insolvency, Sec. 18 InsO
(ccc) Overindebtedness, Sec. 19 InsO
(b) Legal aspects of the crisis
(aa) Crisis prevention
(bb) Early crisis detection
(aaa) Risk Controlling
(bbb) Financial Covenants
(cc) Crisis management
(aaa) Duty of the managing directors to restructure, Sec. 1 I 2 StaRUG
(bbb) Obligation of the shareholders to restructure
(ccc) Convening of the shareholders' meeting, Sec. 49 III GmbHG
(ddd) Tension between out-of-court restructuring and filing for insolvency in the event of imminent insolvency
(eee) Obligation to file for insolvency pursuant to Sec. 15a InsO
(fff) Insolvency liability.
(ggg) Reimbursement of prohibited payments pursuant to Sec. 15b InsO
(dd) Criminal law aspects of the crisis
(2) Restructuring outside a structured procedure
(a) General / Remediation Concept
(b) Restructuring measures
(aa) Financial restructuring measures
(aaa) Capital increase
(bbb) Simplified capital reduction / capital cut
(ccc) Debt-Equity-Swap
(ddd) Shareholder loans
(eee) Restructuring loans / increase in credit lines
(fff) Deferral
(ggg) Debt haircut
(hhh) Subordination
(iii) Public sector financial assistance
(bb) Performance restructuring measures
(cc) Company sale
(dd) Liquidation
(3) StaRUG-Procedure
(a) Restructuring plan, Sec.s 2 to 28 StaRUG
(aa) Formable legal relationships
(bb) Measures
(cc) Selection of those affected by the plan
(dd) Voting procedure
(b) Judicial Stabilization and Restructuring Framework, Sec. 29 to 72 StaRUG
(aa) General / lis pendens
(bb) Instruments of the stabilization and restructuring framework
(aaa) Court plan reconciliation, Sec. 29 II Nr. 1
(bbb) Pre-Assesment, Sec. 29 II Nr. 2 StaRUG
(ccc) Stabilization, Sec. 29 II Nr. 3 StaRUG
(ddd) Plan confirmation, Sec. 29 II Nr. 4 StaRUG
(cc) Monitoring by a restructuring officer , Sec. 73 bis 83 StaRUG
(aaa) Appointment ex officio
(bbb) Requirements for the person of the officer
(ccc) Tasks
(ddd) Appointment upon request
(dd) Public announcement, Sec. 84 to 88 StaRUG
(ee) Rescission and liability law, Sec. 89 to 91 StaRUG
(ff) Employee participation / creditors' council, Sec. 92, 93 StaRUG
(c) Restructuring Moderation, Sec. 94 to 100 StaRUG
(d) Practical example: Restructuring of a holding company
(4) Debtor-in-possesion management, Sec. 270 ff. InsO
(a) General, objective of Debtor-in-possesion management
(b) Application for the opening of insolvency proceedings
(aa) General
(bb) Self application
(cc) Third-party application
(c) Application for an order for Debtor-in-possesion management
(aa) Debtor-in-possesion management planning
(aaa) Financial Plan
(bbb) Implementation concept
(ccc) Presentation of the state of negotiations
(ddd) Arrangements for the performance of duties
(eee) Cost comparison
(bb) Declarations according to Sec. 270a II InsO
(d) Preliminary debtor-in-possesion management
(aa) Requirements according to Sec. 270b
(bb) Measures within the framework of provisional debtor-in-possesion management
(cc) Reasons for annulment under Sec. 270e
(e) Debtor-in-possesion management in opened proceedings
(aa) Requirements for the order of debtor-in-possesion management
(aaa) Meeting the requirements set under Sec. 270b
(bbb) No reasons for repeal under Sec. 270e
(bb) Legal status of the insolvency monitor
(cc) Division of competences between debtor and insolvency monitor
(aaa) Creation of liabilities
(bbb) Legal acts of special significance
(ccc) Takeover of the cash management by the insolvency monitor
(ddd) Order of the need for consent
(eee) Existing legal relationships
(fff) Claims for avoidance
(ggg) Realization of collateral
(dd) Relationship to the corporate law obligations of the management under Sec. 276a InsO
(ee) Repeal
(5) Protective Shield Proceedings
(a) Norm Purpose
(b) Requirements of the protective shield proceedings
(aa) Prerequisites for provisional debtor-in-possession-management
(bb) Reasons for opening insolvency proceedings
(cc) Certification
(dd) Applications required
(c) Effects of the protective shield proceedings
(aa) Deadline for the submission of an insolvency plan
(bb) Security measures
(cc) Authorization of the company to create liabilities of the insolvency estate
(dd) Appointment of a provisional insolvency monitor
(d) Cancellation of the protective shield proceedings
(e) Practical example: Restructuring of a sales company of a globally operating wine wholesale company
(6) Regular procedure (third-party management)
(a) General
(b) Insolvency opening proceedings
(aa) Insolvency filing
(bb) Decision on the insolvency petition
(cc) Provisional insolvency administration
(aaa) Preliminary insolvency administrator
(bbb) Strong preliminary insolvency administrator
(ccc) Provisional insolvency administrator with individual authorization
(dd) Other provisional measures
(aaa) Preliminary Creditors' Committee, No. 1a
(bbb) Enforcement barrier, No. 3
(ccc) Mail blocking, No. 4
(ddd) Prohibition of utilization and confiscation, No. 5
(eee) Legal remedy
(ee) Insolvency allowance
(c) Parties to the proceedings
(d) Effects of the opening of proceedings
(aa) General effects
(bb) Existing legal transactions
(cc) Insolvency avoidance
(dd) Administration and liquidation of the insolvency estate
(e) Costs of the insolvency proceedings
(f) Insolvency plan
(aa) General
(bb) Submission authorization
(cc) Components of the insolvency plan
(aaa) Representative part
(bbb) Formative part
(ccc) Annexes
(dd) Structural measures under company law
(aaa) Procedural Participation of Shareholders
(bbb) Exclusion of change of control clauses
(ccc) Withdrawal of a shareholder
(ee) Voting procedure
(aaa) Examination by the court
(bbb) Discussion and voting meeting
(ccc) Prohibition of obstruction
(ddd) Protection of minorities
(ff) Confirmation of the insolvency plan
(gg) Legal effects of the insolvency plan
(hh) Tax treatment of reorganization profits in insolvency plan proceedings
(g) Practical example of an asset deal: Transferring the reorganization of a specialty mechanical engineering company
(h) Practical example of an insolvency plan: Restructuring of a spa company
(1) Introduction
(a) The term „crisis“ and phases of a crisis
156The business crisis begins well before the entry into material insolvency and finally reaches its climax with the existence of a reason for insolvency (impending insolvency/overindebtedness).BGH, Decision as of. 29.10.2020 – 5 StR 618/19 = NStZ 2021, 308
(aa) Business crisis
157Prior to the onset of material insolvency, various phases can be distinguished in the course of a business crisis. These can be distinguished from one another on the basis of typical symptoms, whereby the individual crisis stages classically, but not necessarily, occur consecutively, but can also overlap in the course of the crisis (see below).Schmidt/Uhlenbruck/Sinz, GmbH in Krise, Sanierung und Insolvenz, 5. Ed. (2016), Sidenr. 1.2; Buth/Hermanns/Kraus, Restrukturierung, Sanierung, Insolvenz, 4. Ed. (2014), Sec. 4 Sidenr. 8
Figure 1: Adapted from: Schmidt/Uhlenbruck/Sinz, GmbH in Krise, Sanierung und Insolvenz, 5th ed. (2016), Sidenr. 1.2
(aaa) Stakeholder Crisis
158The stakeholder crisis is the earliest stage of the crisis and is characterized by dwindling trust and a declining willingness to cooperate among stakeholders and in relation to the company.Vgl. Bea/Dressler, NZI 2021, 67 Typical signs of this phase are a decreasing willingness to perform on the part of employees as well as increasing carelessness. Controlling results are ignored and cohesion within the company dwindles. As a result, the trust of external stakeholders (e.g. customers or suppliers) also dwindles. The lack of cohesion between internal and external stakeholders results in undesirable developments not being recognized and communicated, so that these developments are driven even further.Vgl. Schmidt/Uhlenbruck/Sinz, GmbH in Krise, Sanierung und Insolvenz, 5. Ed. (2016), Sidenr. 1.4
159If the crisis is recognized at this stage, it is usually possible to take countermeasures. Management can initiate measures to strengthen internal and external cohesion and trust. Leadership should be shown, employees should be motivated and a corporate culture should be developed and exemplified.
(bbb) Strategic crisis
160In the strategy crisis, a divergence increasingly develops between the targeted and actual position in the competitive environment. The strategic orientation of the company is not (or no longer) suitable for achieving the desired position in the competitive environment or for securing it in the long term. The core products are mature, there are no new products in development. A market trend has not been recognized as such, which is why no corresponding product development steps have been initiated. As a result, the company is no longer able to find and deliver suitable answers to long-term market and demand developments. As a result, competitors grow faster, while the company's own market share shrinks or does not grow as desired.
161Examples of such a strategy crisis include Blackberry and Nokia. Both manufacturers failed to recognize the potential of the smartphone in good time and therefore lost their exposed competitive positions.
162Regular market research to identify and process long-term and significant technological and demand developments, research and scrutiny of the company's own product range (removing obsolete products / adding new products) or, if necessary, relocations, branch closures or similar measures can help to counteract strategic mistakes. The same applies to strategic crises: if they are identified in good time, countermeasures can be taken.
(ccc) Product and sales crisis
163If a strategy crisis is not recognized, the strategic misalignment initially results in stagnation of demand for previous success drivers, but in the long term in a decline in demand for these main revenue drivers. If this trend continues and becomes entrenched, it eventually leads to declining sales figures.Schmidt/Uhlenbruck/Sinz, GmbH in Krise, Sanierung und Insolvenz, 5. Ed. (2016), Sidenr. 1.6.; Thierhoff/Müller/Beck/Stannek, Unternehmenssanierung, 3. Ed. (2022), Ch. 12 Sidenr. 78. Typically, inventory builds up during this phase, mostly due to attempts to compensate for declining production capacity utilization. In addition, marketing measures usually no longer have an impact and the sales channels do not function as desired, so that there is often a reduction in sales figures and ultimately also the first effects on the financing structure.Thierhoff/Müller/Beck/Stannek, Unternehmenssanierung, 3. Ed. (2022), Ch. 12 Sidenr. 78
164The strategic orientation must be put to the test. Marketing and sales must be improved. It may be possible to improve existing products or develop new products in response to changes in demand and market trends.
(ddd) Profitability crisis
165If the decline in sales continues, profits will soon no longer be generated. Losses and a depletion of equity follow.Schmidt/Uhlenbruck/Sinz, GmbH in Krise, Sanierung und Insolvenz, 5. Ed. (2016), Sidenr. 1.7 The deteriorated operating performance is now visible in the balance sheet. There is a threat of balance sheet over-indebtedness. The deterioration in the balance sheet ratios also reduces the creditworthiness of the company.See Fn. 6
166Performance measures are now absolutely essential for sustainable reorganization.See Fn. 6 Production and personnel costs must be optimized. The company organization as a whole must be streamlined and made more efficient.
(eee) Liquidity crisis
167Due to the lack of capital resources, liquidity bottlenecks occur, additional loans have to be taken out, and loans may be cancelled or credit lines shortened. Reminders from creditors accumulate, arrears arise with the tax office and social security agencies. If the liquidity crisis cannot be overcome, it ultimately leads to insolvency.
(bb) Crisis in the legal sense
168The Federal Court of Justice defines the corporate crisis as a preliminary stage of insolvency.BGH, Decision as of 29.10.2020 – 5 StR 618/19 = NStZ 2021, 308 The concept of crisis was developed into Sec. 32a I 1 GmbHG old version. Sec. Sec. 1 StaRUG obliges the members of the management to continuously monitor developments that could jeopardize the continued existence of the company (crisis) since January 1, 2021. This shifts the legal start of the corporate crisis forward. Whether this already covers all phases of the crisis in the business sense is an open question. At any rate, the earnings crisis and the liquidity crisis are covered by Sec. 1 StaRUG, as these acutely endanger the continued existence of the company.
(cc) Insolvency as the climax of the crisis development
169If, in line with the legal understanding of the Federal Court of Justice, the material insolvency is understood as the climax of the crisis, it must first be explained at which point in the development of the crisis or under which conditions the entry into insolvency maturity takes place. The imminent insolvency regulated in Sec. 18 InsO and preceding the insolvency takes on a special role in this context, as this entitles the managing director to file an insolvency petition pursuant to Sec. 18 I InsO, but does not oblige him to do so. The GmbH is therefore classically said to be ready for insolvency only when insolvency or overindebtedness has occurred. In fact, the insolvency reason of over-indebtedness plays a subordinate role.
170In order to respond appropriately to the current ongoing energy crisis, the German parliament, based on a draft law of the German government,Cf. Amendment proposed by the Federal Government with regard to BR-Dr. 20/2730 has decided on adjustments regarding the forecast period for the determination of over-indebtedness, the maximum period for filing an application due to over-indebtedness as well as the planning period for Debtor-in-possesion management and restructuring plans.BT-Dr. 20/4087 The relevant changes will be discussed at the relevant points.
(aaa) Insolvency, Sec. 17 InsO
Facts constituting insolvency
171Pursuant to Sec. 17 II 1 InsO, a GmbH is insolvent if it is unable to meet its payment obligations as they fall due. In order to determine the insolvency, the amount of free cash immediately available to meet the payment obligations due is determined on a reference date. If all liabilities due on the reporting date can be covered, the debtor company continues to be solvent. In the event of an existing shortfall, in order to exclude only temporary payment stagnations from the definition of insolvency, a second step is taken to determine whether the liquidity gap that has arisen can be closed again within a short period of time. The Federal Court of Justice has specified the quantitative and temporal requirements to be met in this respect. According to this, the company is insolvent if a liquidity gap that cannot be eliminated within three weeks accounts for at least ten percent of the total liabilities.Vgl. nur BGH, Judgement as of 24.5.2005 – IX ZR 123/04 = NZI 2005, 457; BGH, Judgement as of 17.11.2016 – IX ZR 65/15 = NZI 2017, 64
172The liquidity gap is determined by drawing up a liquidity balance sheet. For this purpose, all liabilities falling due on the reporting date and in the three-week observation period following the reporting date must be determined. Next, the free cash available to the company in the three-week observation period must be determined. In this context, all claims, including claims to outstanding deposits, must be taken into account insofar as they can be liquidated within three weeks.Uhlenbruck/Mock, InsO, 15. Ed. (2019), Sec. 17 Sidenr. 53 ff Only if the comparison of liabilities and cash shows a shortfall of more than ten percent of the total liabilities due and falling due in the three-week observation period is the company actually insolvent.Vgl. Uhlenbruck/Mock, InsO, 15. Ed. (2019), Sec. 17 Sidenr. 30
173The ten percent hurdle forms the rule, but is not a rigid limit.Schmidt/Schröder, InsO, 9. Ed. (2022), Sec. 17 Sidenr. 29 bezugnehmend auf BGH, Judgement as of 24.5.2005 - IX ZR 123/04 = NZI 2005, 547 In exceptional cases, deviations can be justified. If the liquidity gap is less than ten percent, insolvency may be assumed if it is likely that the ten percent will soon be exceeded. However, despite exceeding the ten percent hurdle, solvency can still be assumed if it can be assumed on the basis of special circumstances that the liquidity gap will soon be closed completely or at least almost completely.BGH, Judgement as of 17.11.2016 – IX ZR 65/15 = NZI 2017, 64
174Since the period of three weeks specified by the Federal Court of Justice to be used usually appears to be too short from a practical point of view, liquidity planning over a period of three to ten weeks (13 weeks liquidity planning) has become established as the usual procedure in practice.Schulz, NZI 2020, 1073 (1074); gegen einen Prognosezeitraum von über drei Monaten vgl. Uhlenbruck/Mock, InsO, 15. Ed. (2019), Sec. 17 Sidenr. 25 The choice of a longer period also seems sensible here, since by including more weeks, on the one hand the management reduces the likelihood of becoming liable to prosecution for insolvency and, on the other, better transparency is created for other stakeholders.
Presumption pursuant to Sec. 17 II 2 InsO
175Pursuant to Sec. 17 II 2 InsO, the insolvency of the company is presumed if the company has ceased its payments. This is the case if circumstances become apparent which are recognizable to legal transactions and which indicate that the company can no longer meet its due payment obligations. Such an indication of the presumption of inability to pay can be seen, for example, in the slow payment of social security contributions or tax claims.Vgl. nur BGH, Decision as of 15.11.2018 – IX ZR 81/18 = BeckRS 2018, 32036 Other evidence may include arrears of wages, operating costs or insurance contributions.Stürner/Eidenmüller/Schoppmeyer/Eilenberger, InsO, 4. Ed. (2019), Sec. 17 Sidenr. 29
(bbb) Imminent insolvency, Sec. 18 InsO
176Pursuant to Sec. 18 I InsO, imminent insolvency also constitutes a ground for opening insolvency proceedings within the meaning of Sec. 16 InsO. In addition, imminent insolvency is a prerequisite for entry into the proceedings under the stabilization and restructuring framework of StaRUG. Companies should have the option of entering structured restructuring proceedings as early as possible in order to increase their chances of restructuring. The fact that the only option is to file an application on one's own behalf prevents creditors from "sending" the company into regular insolvency proceedings at an early stage before insolvency occurs.Vgl. hierzu BT-Dr. 12/2443, 114
177Pursuant to Sec. 18 II InsO, the company is deemed to be in imminent insolvency if it is not expected to be in a position to meet its payment obligations as they fall due over a forecast period of 24 months. In order to be able to make such a forecast of (in)solvency, all existing liabilities and those that are expected to arise and fall due during the forecast period must be compared with the cash and cash equivalents available at the respective expected due dates. If the comparison shows that the company will not be in a position to meet the liabilities then due at any time within the forecast period of 24 months, it is to be regarded as threatened with insolvency. In contrast to the determination of insolvency, it is not important here whether a liquidity gap is only temporary. The decisive factor is whether or not it is more likely than not that the company will be able to meet all its liabilities as they fall due during the 24-month prog-nosis period.Fridgen/Geiwitz/Göpfert/Wolfer, BeckOK Insolvenzrecht, 26. Edition (2022), Sec. 18 Sidenr. 22; Uhlenbruck/Mock, InsO, 15. Ed. (2019), Sec. 18 Sidenr. 20
178In the event of imminent insolvency, the managing director of the GmbH is not yet obliged to file an application. However, he must carefully check whether there is also over-indebtedness within the meaning of Sec. 19 InsO, which would in turn oblige him to file an application in accordance with Sec. 15a I 1 InsO. In addition, the obligations arising from Sec. 1 StaRUG apply, as the threat of insolvency represents an event that endangers the company as a going concern. At this point at the latest, the company must be closely monitored.
179In the case of joint power of representation, the application to open insolvency proceedings in the event of imminent insolvency can only be filed jointly by all managing directors appointed to represent the company, Sec. 18 III InsO. In addition, the GmbH managing director should obtain a resolution from the shareholders' meeting in order not to be exposed to possible claims for damages, whereby the managing director is in any case obliged to inform the shareholders in accordance with Sec. 1 StaRUG (cf. the situation regarding the notification of a restructuring matter under the StaRUG).
(ccc) Overindebtedness, Sec. 19 InsO
180According to Sec. 19 II 1 InsO, over-indebtedness exists if the assets no longer cover the existing liabilities (irrespective of the due date), unless the continuation of the company in the next twelve months is considered predominantly probable. In contrast to imminent insolvency, the forecast period is shortened from 24 months to 12 months.
181According to the most recent decision by the German parliament, the forecast period is temporarily reduced to four months in order to avoid the obligation to file for insolvency for companies whose continued existence would be out of the question if the current uncertainties were disregarded.BT-Dr. 20/4087; Änderungsantrag der BR zu BR-Dr. 20/2730 S. 5 In practice, this means that a company that does not become insolvent within the next four months is not overindebted. The reduction is not linked to any further preconditions. The provision also applies to those companies that were already over-indebted before the relevant amendment to the Act came into force, but the relevant point in time for filing an application in good time within the meaning of Sec. 15a I 1 has not yet passed.See Fn. 23.
182In order to determine the over-indebtedness status, a going concern forecast for the next twelve months must therefore be prepared in addition to the examination of the balance sheet over-indebtedness.
183The examination of balance sheet over-indebtedness is purely hypothetical. For this purpose, all existing liabilities are compared with the company's assets, irrespective of when they are due. On the liabilities side of this over-indebtedness balance sheet, all potential insolvency claims within the meaning of Sec. 38 InsO must be taken into account. Subordinated claims pursuant to Sec. 39 InsO must also be recognized as liabilitiesUhlenbruck/Mock, InsO, 15. Ed. (2019), Sec. 19 Sidenr. 161; K. Schmidt/Schmidt, InsO, 19. Ed. (2016), Sec. 19 Sidenr. 35 unless there is a qualified subordination within the meaning of Sec. 19 II 2 InsO. Assets are recognized at liquidation values, i.e. adjusted for hidden reserves and taking into account expected expenses for the sale, as well as expected losses in value depending on the speed of liquidation.Fridgen/Geiwitz/Göpfert/Wolfer, BeckOK Insolvenzrecht, 26. Edition (2022), Sec. 19 Sidenr. 21 f. Caution is generally required when determining the liquidation values in order to prevent the risk of liability due to violation of the obligation to file for insolvency.Vgl. dazu Uhlenbruck/Mock InsO, 15. Ed. (2019), Sec. 19 Sidenr. 130 ff.
184Only if the liabilities side of this balance sheet exceeds the assets side (see below) can over-indebtedness be considered as a reason for opening insolvency proceedings within the meaning of Sec. 19 InsO. However, this can only be affirmed with the legal consequence of the obligation to file an application if, in addition, the going concern forecast to be prepared in the second step is negative. If the going concern forecast is positive, however, there is no over-indebtedness within the meaning of Sec. 19 InsO.
Figure 2:
Comparison of non-overleveraged/overleveraged balance sheet with presentation of loss carryforward on the assets side for illustrative purposes.
(Adapted from: https://www.rwi.uzh.ch/static/elt/lst-vogt/gesellschaftsrecht/charakter/de/html/kapverlustuebersch_ueberschuldung.html)
185A favorable going concern assumption requires the will to continue as a going concern and the ability of the company to survive. The assessment of the ability to survive is made on the basis of a meaningful financial plan.BGH, Decision as of 9.10.2006 – II ZR 303/05 = NZI 2007, 44. The purpose of preparing a going concern forecast is to ensure that creditors are satisfied.Uhlenbruck/Mock, InsO, 15. Ed. (2019), Sec. 19 Sidenr. 220 The forecast must therefore be negative if the financial plan shows that it is highly likely that the company will not be able to meet its liabilities as they fall due during the forecast period (cf. impending insolvency).Braun/Salm-Hoogstraeten, InsO, 9. Ed. (2022), Sec. 19 Rn 17
(b) Legal aspects of the crisis
(aa) Crisis prevention
186The regulations on capital resources and capital maintenance for the GmbH already ensure basic risk provisioning.Vgl. Schmidt/Uhlenbruck/Schmidt, GmbH in Krise, Sanierung und Insolvenz, 5. Ed. (2016), Sidenr. 1.31 ff. These include the obligation to make contributions, the difference liability in the event of overvaluation of contributions in kind or the default liability pursuant to Sec. 24 GmbHG. This also includes Sec. 30, 31 GmbHG (payment prohibition and reimbursement obligation), which serve to maintain the share capital, and the accounting obligation pursuant to Sec. 41 GmbHG.
187The obligation to convene a shareholders' meeting in the event of a loss amounting to half of the share capital, codified in Sec. 49 III GmbHG, is also one of the mechanisms of crisis prevention.
(bb) Early crisis detection
(aaa) Risk Controlling
188According to Sec. 1 I StaRUG, the managing director of the GmbH is obliged to permanently take measures for early crisis detection. The early recognition of risk factors provides the company with a larger time frame within which it can act to avert the crisis and thus increases the chances of successfully and sustainably combating the crisis.Morgen/Gerig, StaRUG, 2. Ed. (2022), Sec. 1 Sidenr. 1 The monitoring obligation contained in Sec. 1 I StaRUG applies to the managers of all legal entities.
189Concrete requirements for the design of an early crisis detection system cannot be derived from Sec. 1 I StaRUG. The content and scope of the monitoring system are determined by the size and complexity of the company.BT-Dr 19/24181, 104 Depending on their business purpose, companies are also exposed to different risk factors. Risk controlling must keep this in mind.Vgl. Scholz/Schneider, GmbHG, 10. Ed. (2006), Sec. 43 Sidenr. 96 Regardless of the size of the company, the managing directors are required to continuously monitor and review the circumstances of the GmbH and developments relevant to the company's operations to determine whether they have the potential to jeopardize the company's continued existence if they continue unimpeded.BT-Dr 19/24181, 104
190The managing director must provide for an organization that enables him to have an overview of the economic and financial situation of the company at any time, which is necessary for the ongoing supervision.BGH, Judgement as of 20.2.1995 – II ZR 9/94 = NJW-RR 1995, 669 he minimum requirement, irrespective of the size of the company, is proper accounting in line with general requirementsVgl. Sec. 41 GmbHG and integrated income and liquidity planning for the 24-month period.Gottwald/Haas/Haas/Kolmann/Kurz, Insolvenzrechts-Handbuch, 6. Ed. (2020), Sec. 90 Sidenr. 12
191The evaluation of the balance sheet and income statement on the basis of certain ratios such as equity ratio, debt repayment period, interest burden ratio, return on assets, cash flow performance ratio, etc.Vgl. Müller/Winkeljohann/Axhausen, Beck’sches Handbuch der GmbH, 4. Ed. (2009), Sec. 15 Sidenr. 178 provides the managing director with at least an overview of the company's financial situation in the past. The ratios are to be developed from careful financial planning for the company and continuously compared with the actual financial situation.
192However, this method alone is only of limited use for identifying risk factors as early as possible and combating them effectively, as certain undesirable developments within and outside the company do not have an immediate impact on its success and therefore only show up in the balance sheet or income statement with a considerable time lag.Müller/Winkeljohann/Axhausen, Beck’sches Handbuch der GmbH, 4. Ed. (2009), Sec. 15 Sidenr. 42, mit Verweis auf Leker, ZfbF 1994, 734 The mere analysis of classical financial ratios does not allow for a future-oriented development forecast.Buth/Hermanns/Wilden, Restrukturierung, Sanierung, Insolvenz, 4. Ed. (2014), Sec. 2 Sidenr. 18
193In order to be able to map all of the crisis phases outlined at the beginning and to actually identify developments with crisis potential in a forward-looking manner, the crisis early warning system must therefore be highly sensitive to the crisis symptoms described. To this end, it must constantly perceive, process and evaluate both internal and external developments.Vgl. Müller/Winkeljohann/Axhausen, Beck’sches Handbuch der GmbH, 4. Ed. (2009), Sec. 15 Sidenr. 178 These include changes in demand, technological developments, the rise of new competitors, or the loss of customers or key employees.Vgl. Morgen/Gerig, StaRUG, 2. Ed. (2022), Sec. 1 Sidenr. 30 Each company has to define appropriate market indicators for its own business model, which can be used to perceive and evaluate important developments.z.B. Dieselpreise für Speditionen, Getreidepreise für Bäckereien, Futtermittelpreise für Landwirte, Holzpreise für Schreinerbetriebe, Gaspreise für Brennereien, etc. These developments must be examined for their crisis potential, taking into account the strategic orientation of the company, and the result of this examination must then be communicated internally and implemented in suitable crisis prevention measures.Vgl. Buth/Hermanns/Wilden, Restrukturierung, Sanierung, Insolvenz, 4. Ed. (2014), Sec. 2 Sidenr. 48 The prerequisite is therefore careful planning of the business model, which enables the managing director to compare the targeted competitive position with the actual situation at any time.
194Knowledge of the various crisis stages and an understanding of the different crisis symptoms are therefore basic prerequisites for the implementation of successful risk controlling.
(bbb) Financial Covenants
195As a rule, loan agreements contain financial covenants. These are specific financial ratios that the lender can use to monitor the borrower's financial situation during the term of the loan. The company is obliged to report regularly on compliance with these covenants. In the event of non-compliance, there is a risk that the loan will be terminated and that the resulting maturity of the loan proceeds will ultimately result in insolvency. The Company is therefore also contractually obligated to monitor its financial situation on an ongoing basis. In this way, the covenants contribute to the early detection of crises.Vgl. Buth/Hermanns/Wilden, Restrukturierung, Sanierung, Insolvenz, 4. Ed. (2014), Sec. 2 Sidenr. 93
(cc) Crisis management
(aaa) Duty of the managing directors to restructure, Sec. 1 I 2 StaRUG
196In times of crisis, the managing director's duty to manage the company changes, at least partially, into a duty to restructure pursuant to Sec. 1 I 2 StaRUG.Müller/Winkeljohann/Axhausen, Beck’sches Handbuch der GmbH, 4. Ed. (2009), Sec. 15 Sidenr. 121
197The duty to take countermeasures pursuant to Sec. 1 I 2 StaRUG applies to the managing director from the beginning of the first symptoms of a crisis. At the same time, he is obliged under Sec. 1 I 2 and 3 StaRUG to immediately report to the supervisory bodies on the measures taken and, if they are responsible, to work towards their referral. Further-reaching obligations remain unaffected pursuant to Sec. 1 III StaRUG. The various obligations under company law and insolvency law which affect the managing director in the further course of the crisis (explained in detail in c) to g)) therefore continue to apply.
198The managing director must examine the company's ability to restructure and, if necessary, develop a suitable restructuring concept. This includes the examination and subsequent implementation and monitoring of financial and performance-related restructuring options (for more details on out-of-court restructuring, see B below).
(bbb) Obligation of the shareholders to restructure
199The extent to which the shareholders of the GmbH are also subject to a restructuring obligation has not been conclusively clarified by case law. In any case, there is no obligation to make additional contributions. However, such an obligation may arise from the articles of association, Sec. 26 I GmbHG. If an obligation to make additional contributions is not contained in the articles of association, its subsequent inclusion requires the consent of all shareholders pursuant to Sec. 53 III GmbHG. The shareholders cannot be forced to do this. However, the shareholders may be obliged by their fiduciary duty to make their share available if they do not wish to approve a restructuring measure. The decisions made by the Federal Court of Justice to this effectVgl. nur BGH, Judgement as of 9.6.2015 – II ZR 420/13 = NJW 2015, 2882 has so far only applied to partnerships and cannot be transferred to the GmbH without further ado. It remains to be seen whether the basic principle of "reorganization or withdrawal" will also become established for the GmbH.Vgl. Thierhoff/Müller/Müller/Lötschert/Schmidt, Unternehmenssanierung, 3. Ed. (2022), Ch. 8 Sidenr. 182 In particular, the introduction of the obligation to establish an early crisis detection system (Sec. 1 StaRUG) can lead to a shift in obligations here, because early crisis detection only makes sense if, when the crisis is detected by the managing director, the shareholders at least cannot block measures to deal with the crisis. Otherwise, the system of early crisis detection would come to nothing.
(ccc) Convening of the shareholders' meeting, Sec. 49 III GmbHG
200If the equity capital is depleted to half of the nominal capital figure, the managing director must immediately convene the shareholders' meeting in accordance with Sec. 49 III GmbHG. It should be noted, however, that this also applies in cases in which the managing director becomes aware of such a loss without preparing an interim balance sheet.Sog. „Bilanz im Kopf des Geschäftsführers“; vgl. Baumbach/Hueck/Zöllner, GmbHG, 20. Ed. (2013), Sec. 49 Sidenr. 20; Beck/Depré, Praxis der Insolvenz, 3. Auflage (2017), Sec. 33 Sidenr. 10 In the event of failure to do so, this may give rise to criminal liability on the part of the managing director in accordance with Sec. 84 I of the German Limited Liability Companies Act (GmbHG).
(ddd) Tension between out-of-court restructuring and filing for insolvency in the event of imminent insolvency
201If the company is already at the stage of imminent insolvency, the managing director is caught between the interests of the shareholders and those of the creditors. The filing of an application for insolvency, which is possible but not obligatory after the onset of imminent insolvency, and the subsequent opening of insolvency proceedings have various disadvantages for the shareholders. Firstly, claims for repayment of a shareholder loan or claims arising from legal acts which correspond economically to such a loan are only satisfied on a subordinate basis in accordance with Sec. 39 I No. 5 InsO. With the opening of insolvency proceedings, the shareholders also suffer a loss of control through the transfer of the power of disposal to the insolvency administrator, Sec. 80 I InsO. In contrast to the managing director, they are not authorized to issue instructions to the insolvency administrator. Furthermore, in the final distribution, the shareholders only receive the surplus which results after the complete satisfaction of all creditors, Sec. 199 InsO. Such a surplus rarely occurs, so that as a rule the shareholders can no longer expect any income from their shareholding when insolvency proceedings are opened.
202If the managing director files for insolvency when insolvency is imminent, he may be ignoring the interests of the shareholders. For this reason, the managing director previously had to obtain a resolution from the shareholders in the event of imminent insolvency if he wished to file an application. The absence of a resolution had no effect on the validity of the application, but led to liability in the internal relationship if the shareholders suffered financial damage.Geißler, ZInsO 2013, 919; Uhlenbruck/Mock, InsO, 15. Ed. (2019), Sec. 18 Sidenr. 76; Fridgen/Geiwitz/Göpfert/Fridgen/Geiwitz/Göpfert, BeckOK Insolvenzrecht, 26. Edition (2022), Sec. 18 Sidenr. 4 Whether the introduction of the obligation to restructure under Sec. 1 of the Act on the Restructuring of Companies (StaRUG) entails a "shift of duties" to the effect that the managing director may now submit the application even against the will of the shareholders is still an open question. However, to be on the safe side, the managing director should always obtain an affirmative resolution from the shareholders before making the application himself in order to avoid liability.
203The same applies to the question of whether a consenting resolution of the shareholders must be obtained before the restructuring matter is reported in accordance with the StaRUG.Vgl. Braun/Ehret, StaRUG, 1. Ed. (2021), Sec. 1 Sidenr. 10; Morgen/Gerig, StaRUG, 2. Ed. (2022), Sec. 1 Sidenr. 21. Further details are given at the appropriate place.
(eee) Obligation to file for insolvency pursuant to Sec. 15a InsO
204Pursuant to Sec. 15a I 1 InsO, the managing director of a GmbH is obliged to file an application if insolvency and/or overindebtedness has/have occurred. Representation relationships or internal management distributions are irrelevant, each member of the management is equally obligated to file an application and cannot be exempted from this obligation by internal agreements.Uhlenbruck/Hirte, InsO, 15. Ed. (2019), Sec. 15a Sidenr. 7 Even a shareholders' resolution does not exempt the company from the obligation to file an application. Such an instruction is irrelevant, as it is opposed to the obligation to file an insolvency petition, which is subject to criminal law.
205The application must be filed without undue delay, but no later than three weeks after the occurrence of insolvency or six weeks after the occurrence of overindebtedness.
206In the course of the current energy crisis, the German parliament decided to temporarily increase the maximum period for filing an insolvency petition in the event of over-indebtedness to eight weeks, although this period may still not be exhausted if a sustainable elimination of the over-indebtedness is deemed to have already been ruled out at an earlier point in time.BT-Dr. 20/4087; Änderungsantrag der BR zu BR-Dr. 20/2730 S. 6 This is to recognize that planning remediation efforts in the current situation requires more time than usual, as the situation has become even more complex.See Fn. 55
207he period begins with the occurrence of insolvency or overindebtedness. Knowledge or grossly negligent ignorance on the part of the managing directors is not required for the period to commence. The occurrence of the obligation to file an application is thus not linked to any reproachable conduct on the part of the managing directors.Stürner/Eidenmüller/Schoppmeyer/Klöhn, InsO, 4. Ed. (2019), Sec. 15a Sidenr. 118; Uhlenbruck/Hirte, InsO, 15. Ed. (2019), Sec. 15a Sidenr. 14
208The time limit is not suspended by reorganization efforts, regardless of whether these are promising or not.BGH, Judgement as of 12.2.2007 – II ZR 308/05 = NJW-RR 2007, 690
209Accordingly, the managing directors have a maximum of three weeks (six weeks in the case of over-indebtedness) from the date on which insolvency proceedings become ripe to prevent insolvency proceedings by taking out-of-court restructuring measures while avoiding consequences under criminal and liability law. In the event of a breach of the obligation to file an application, there is a risk of claims for damages and consequences under criminal law (see below for more details).
210In the case of a GmbH in a state of insolvency, the shareholders are obliged to file an application in accordance with Sec. 15a III 1 InsO. This obligation follows from their competence to eliminate the lack of management pursuant to Sec. 46 No. 5 GmbHG by appointing a new managing director.Vgl. BT-Dr. 16/6140 However, if the articles of association expressly transfer the competence to appoint the managing directors to a mandatory or facultative supervisory board in deviation from Sec. 46 No. 5 GmbHG, the members of such supervisory board shall bear the competence to terminate the incapacity to manage and thus also the obligation to file an application under Sec. 15a III InsO.K. Schmidt/Schmidt/Herchen, InsO, 19. Ed. (2016), Sec. 15a Sidenr. 22
(fff) Insolvency liability
211In the event of a breach of the obligation to file for insolvency, there is a risk not only of criminal consequences but also, in particular, of claims for damages by creditors and the company itself.
212The managing director is liable to the creditors in particular under Sec. 823 II BGB in conjunction with Sec. 15a I 1 InsO. Under Sec. 823 II BGB, the person who violates a protective law is obliged to compensate the persons protected by this law for the resulting damage. Sec. 15a I 1 InsO is a protective law for the protection of the creditors of the insolvency debtor in this sense.BGH, Judgement as of 3.2.1987 – VI ZR 268/85 = NJW 1987, 2433 If the managing director violates the resulting obligation to file an application, he is obliged to compensate the creditors for the resulting damage.
213Liability under Sec. 823 II BGB requires fault on the part of the managing director; negligent ignorance of the obligation to file an application is sufficient for this. Since the managing director is obliged to monitor the financial and economic situation of the company on an ongoing basis, he cannot plead that he was simply unaware of the obligation to file an application or of the circumstances giving rise to this obligation.
214If the managing director does not have the personal knowledge required to examine whether the company is ready for insolvency, he is obliged to seek advice from a professionally qualified person without delay if there are signs of a crisis. If, on the basis of such advice, he refrains from filing an application despite the fact that the company is actually ready for insolvency and is therefore obliged to file an application, he may not be at fault.BGH, Judgement as of 27.3.2012 – II ZR 171/10 = NZG 2012, 672
215The managing director is liable to the old creditors (= those creditors with whom the business relationship already existed at the time of the commencement of insolvency) for their quota damage. This refers to the damage suffered by the creditors due to the fact that the expected insolvency quota deteriorates as a result of the delay in filing the petition. The quota damage corresponds to the difference between the actual quota and that which would have been expected if the application had been filed in good time.BGH, Judgement as of 3.2.1987 – VI ZR 268/85 = NJW 1987, 2433; Uhlenbruck/Hirte, InsO, 15. Ed. (2019), Sec. 15a Sidenr. 40
216The managing director is obliged to compensate the new creditors (= those creditors with whom the business relationship was only entered into after the commencement of the insolvency maturity) for their individual damage, i.e. the damage which they suffer as a result of the fact that they still enter into a business relationship with the company due to the delayed filing of the application in ignorance of the insolvency maturity of the company. The damages are limited to the so-called negative interest, i.e. the new creditors are to be placed by the managing director in such a position as if they had refrained from entering into a business relationship in the knowledge that the company was ready for insolvency.Vgl. nur BGH, Judgement as of 25.7.2005 – II ZR 390/03 = DStR 2005, 1743; Uhlenbruck/Hirte, InsO, 15. Ed. (2019), Sec. 15a Sidenr. 40
(ggg) Reimbursement of prohibited payments pursuant to Sec. 15b InsO
217Pursuant to Sec. 15b InsO, the managing director is obliged to reimburse payments made after the occurrence of insolvency maturity.
218In accordance with the wording of Sec. 15b I 1 InsO, the payment ban applies from the time when the obligation to file an application arises, i.e. upon the occurrence of insolvency or overindebtedness and not only upon expiry of the three or six-week application period. The reimbursement obligation associated with the payment ban arises regardless of fault for each prohibited payment, so there is a high liability risk for the managing director. The managing director must therefore (also independently of the obligation arising from Sec. 1 StaRUG) continuously monitor the financial situation of the company in order to protect himself from liability for prohibited payments.
219Pursuant to Sec. 15b I 2 InsO, there is no reimbursement obligation for such payments that are consistent with the due diligence of a prudent business manager. The legislator has specified which payments are to be privileged in this sense in paragraphs 2 and 3. According to this, in particular payments which serve to maintain business operations are not to be prohibited, provided that they are made within the relevant period for filing an application under Sec. 15a I 1, 2 InsO (i.e. before the expiry of the three- or six-week period). According to the intention of the legislator, the managers of the company should not be subject to the restrictions imposed by the previous case law on Sec. 64 GmbHG in the case of emergency management. Thus, the privileged status of a payment should no longer necessarily depend on whether the payment leads to an increase in the assets. Thus, the legislator no longer excludes payments for services, for example, from the scope of protection of the privilege rule.BT-Dr. 19/24181, 194
220However, even such payments which are to be regarded as necessary for the maintenance of business operations can only benefit from this privilege if, at the same time, measures are pursued with the diligence of a prudent business manager for the sustained elimination of insolvency maturity or for the preparation of an insolvency petition. Since liability under Sec. 15b InsO and thus the question of whether a payment is subject to the privilege under Sec. 15b I 2 InsO only play a role in insolvency proceedings and thus in the event of the failure of any reorganization measures, the question will arise in particular as to the extent to which these failed measures can be measures for the sustained elimination of insolvency maturity which keep open the scope of protection of the liability privilege.
221It is not yet possible to predict how case law will deal with the new legal situation due to the proximity of its entry into force. Which payments will be covered by the privilege and which will not remains a decision to be made on a case-by-case basis. In order to avoid any backsliding in the subsequent assessment of restructuring measures, the managing director should seek qualified advice and carefully document his decision-making process.Vgl. dazu auch Fridgen/Geiwitz/Göpfert/Wolfer, BeckOK Insolvenzrecht, 26. Edition (2022), Sec. 15b Sidenr. 20; Nerlich/Römermann/Mönning, InsO, 43. EL (2021), Sec. 15b Sidenr. 17
222Payments made between the filing of the application and the opening of insolvency proceedings with the consent of a provisional insolvency administrator are also exempt from the payment ban.
223Sec. 15b InsO does not apply to insolvency proceedings opened before the effective date of January 1, 2021. For these, the old regulation of Sec. 64 GmbHG continues to apply. Overall, all payments made before the entry into force of the new Sec. 15b InsO must still be assessed in accordance with the old Sec. 64 GmbHG, irrespective of the opening of insolvency proceedings.Vgl. von Göler/Laskos, GmbHG, Stand: 9.3.2022, Sec. 64 Accordingly, payments that were compatible with the due diligence of a prudent businessman were also exempt from the prohibition. However, the principles developed by the case law on Sec. 64 GmbHG continue to apply to these payments as well.
224Under the old provision of Sec. 64 GmbHG, the managing directors were obliged to reimburse all payments made, irrespective of whether this caused damage to anyone or not. The new Sec. 15b IV InsO limits the reimbursement obligation to the damage incurred by the creditors as a result of the payment. The reimbursement is still to be made to the company and not to the creditors.
(dd) Criminal law aspects of the crisis
225In addition to the obligations and liability risks under civil law, the managing director of the GmbH also faces criminal law consequences in times of crisis, for example from Sec. 15a IV InsO, Sec. 263 StGB or Sec. 283 I No. 7b, VI StGB.Dazu vertieft Knops/Bamberger/Lieser/Lieser/Hancke, Recht der Sanierungsfinanzierung, 2. Ed. (2019), Sec. 31 mwN
(2) Restructuring outside a structured procedure
226As long as the GmbH is not yet insolvent or overindebted, it can also be reorganized outside of court proceedings. If insolvency or over-indebtedness has occurred, Sec. 19 InsO, the managing director is obliged to file an application under Sec. 15a I 1 InsO. Even promising restructuring efforts do not lead to an extension of the deadline.Schmidt/Uhlenbruck/Uhlenbruck, GmbH in Krise, Sanierung und Insolvenz, 5. Ed. (2016), Sidenr. 2.5. The managing director must therefore first check whether an out-of-court restructuring is still possible at all. In the event of a breach of the obligation to file an application, there is a risk of the civil and criminal consequences already described.
(a) General / Remediation Concept
227In order to prevent a temporary slide into material insolvency during the free reorganization, short-term measures should first be taken to temporarily secure liquidity. Possible measures include standstill agreements with banks or bridging loans from banks or shareholders. The sale of non-essential assets can also help to improve liquidity in the short term.Buth/Hermanns/Kraus, Restrukturierung, Sanierung, Insolvenz, 4. Ed. (2014), Sec. 4 Sidenr. 31
228For a long-term turnaround, a precise analysis of the external corporate environment as well as of the company itself is required. In particular, it is essential to identify the causes of the crisis. Without precise knowledge of the causes of the crisis, it is not possible to combat it effectively.Vgl. nur Buth/Hermanns/Kraus, Restrukturierung, Sanierung, Insolvenz, 4. Ed. (2014), Sec. 4 Sidenr. 4; Morgen/Gerig, StaRUG, 2. Ed. (2022), Sec. 1 Sidenr. 33; Thierhoff/Müller/Thierhoff, Unternehmenssanierung, 3. Ed. (2022), Ch. 4 Sidenr. 68 Otherwise, the fight against the crisis will be exhausted in the continuous combating of symptoms; a sustainable turnaround will not be achieved in this way.
229A restructuring concept must be developed from the results of the company analysis. The restructuring plan must be based on the known and recognizable facts and must clearly identify and explain the measures to be taken to achieve sustainable restructuring.Thierhoff/Müller/Krumbholz, Unternehmenssanierung, 3. Ed. (2022), Ch. 5 Sidenr. 44 The IDW Standards ES 6, for which a new draft has been adopted as of September 2022,Verfügbar unter: https://www.idw.de/IDW/IDW-Verlautbarungen/IDW-S/ES-6-nF-20220927-2.pdf can provide guidance for the design of a sound restructuring concept. According to these, a restructuring concept consists of seven core components: The description of the subject matter, basic information regarding the economic and legal starting position of the company, the analysis of the crisis stage, cause(s) and risk of insolvency, the presentation of a mission statement of the restructured company, the presentation of measures against the risk of insolvency and the crisis, an integrated business plan as well as a summarized assessment of the company's ability to restructure.See Fn. 72, p. 4 Sidenr. 11 With regard to the perspective to be adopted by the preparer, according to the latest draft of the standards, the particular importance of ESG aspects (environmental, social and governance) must be taken into account, as this is the only way to create a reasonable basis of trust between the stakeholders and the troubled company.Vgl. See Fn. 72, p. 7 Sidenr. 20 Likewise, tax effects of the crisis must be taken into account, such as the tax treatment of reorganization profits ( ).See Fn. 72, p. 19 Sidenr. 83. Sustainable turnaround requires restructuring measures in strategic, operational and financial terms.Buth/Hermanns/Kraus, Restrukturierung, Sanierung, Insolvenz, 4. Ed. (2014), Sec. 4 Sidenr. 12
230On the basis of the restructuring concept, the company's ability to be restructured must be examined. The company is capable of being restructured if there is a sufficient probability that it will be able to generate profits again under its own steam.Müller/Winkeljohann/Axhausen, Beck’sches Handbuch der GmbH, 4. Ed. (2009), Sec. 15 Sidenr. 53 The restructuring concept serves as a decision-making basis for the creditors. If debt capital measures are required for financial restructuring - as is usually the case - the managing director must take all major creditors into account as part of an out-of-court restructuring settlement. Only on the basis of a coherent restructuring concept can the creditors assess their risks and decide for or against participation in the restructuring measures.Buth/Hermanns/Kraus, Restrukturierung, Sanierung, Insolvenz, 4. Ed. (2014), Sec. 4 Sidenr. 34; Thierhoff/Müller/Krumbholz, Unternehmenssanierung, 3. Ed. (2022), Ch. 5. Sidenr. 44 If the creditors can only be persuaded to take appropriate steps in isolated cases, long-term restructuring cannot be achieved. It may also be difficult to convince individual creditors of the merits of the measures if the rest of them are not positively disposed towards them. Individual important creditors can thus hinder the conclusion of a restructuring agreement.Vgl. Schmidt/Uhlenbruck/Uhlenbruck, GmbH in Krise, Sanierung und Insolvenz, 5. Ed. (2016), Sidenr. 2.6 In the meantime, this problem of the so-called piece-rate disturbers has been partially solved by the proceedings under the stabilization and restructuring framework of the StaRUG. Here, a restructuring concept can also be enforced against the will of individual creditors. However, these procedures can only be used if there is a threat of insolvency ( ).
231For the creditors, a free reorganization entails certain risks. In particular, there is a risk that payments received by the company from the creditors in the course of the reorganization may be contested by the subsequent insolvency administrator on the grounds of intentional disadvantage to the other creditors pursuant to Sec. 133 InsO and must be returned. The parties involved can minimize the risk of avoidance by acting on the basis of a conclusive reorganization concept which is based on the actual circumstances and offers a serious and justified prospect of success. In this case, the intent to disadvantage the creditors required for a challenge under Sec. 133 InsO is lacking.BGH, Judgement as of 8.12.2011 – IX ZR 156/09 = NZI 2012, 142
232The main advantages of an out-of-court reorganization are that the company retains control and is therefore flexible in its choice of reorganization measures, can avoid a loss of image through the ordering of insolvency proceedings that still have a negative impact, and can ultimately also avoid the costs of insolvency proceedings.Schmidt/Uhlenbruck/Uhlenbruck, GmbH in Krise, Sanierung und Insolvenz, 5. Ed. (2016), Sidenr. 2.2; Buth/Hermanns/Buth/Hermanns, Restrukturierung, Sanierung, Insolvenz, 4. Ed. (2014), Sec. 16 Sidenr. 44
233Once the restructuring measures have been initiated, the restructuring process must also be monitored. This includes, in any case, a weekly update of the short-term liquidity planning, monitoring of the financial development on the basis of covenants, an ongoing target/actual comparison on the basis of the restructuring plan and, if necessary, adjustment of the restructuring plan.Vgl. Thierhoff/Müller/Thierhoff, Unternehmenssanierung, 3. Ed. (2022), Ch. 6 Sidenr. 20 ff
(b) Restructuring measures
(aa) Financial restructuring measures
234In the case of financial rehabilitation, a distinction must be made between internal and external financing measures.Buth/Hermanns/Kraus, Restrukturierung, Sanierung, Insolvenz, 4. Ed. (2014), Sec. 4 Sidenr. 30; Schmidt/Uhlenbruck/Uhlenbruck, GmbH in Krise, Sanierung und Insolvenz, 5. Ed. (2016), Sidenr. 2.16 Before taking external financing measures, possible measures for internal financing should be exhausted, as these can be achieved using the company's own resources and are therefore generally less bureaucratic and do not give rise to any new liabilities. Internal financing measures include, for example, the reduction of working capital, the reduction of inventories and the sale of assets not required for operations.Vgl. Buth/Hermanns/Kraus, Restrukturierung, Sanierung, Insolvenz, 4. Ed. (2014), Sec. 4 Sidenr. 31
235If the company is unable to dispose of individual assets, a sale under a sale and lease back agreement may be appropriate. While the sale provides the company with short-term liquidity, the leaseback agreement ensures that the assets in question can continue to be used.Thierhoff/Müller/Krumbholz, Unternehmenssanierung, 3. Ed. (2022), Ch. 5 Sidenr. 109 However, this puts a strain on current liquidity and rental costs are likely to regularly exceed depreciation.
236In addition, it should be examined whether receivables management can be intensified.Buth/Hermanns/Kraus, Restrukturierung, Sanierung, Insolvenz, 4. Ed. (2014), Sec. 4 Sidenr. 31 In this context, it is also possible to reduce receivables through factoring. Although a discount on the value of the receivable must be expected, depending on the recoverability of the receivable, the company may save itself time-consuming collection efforts and can generate liquid funds in the short term by selling the receivable.Vgl. Thierhoff/Müller/Krumbholz, Unternehmenssanierung, 3. Ed. (2022), Ch. 5 Sidenr. 116 f
237As the crisis progresses, it becomes increasingly difficult to limit restructuring to internal measures.Schmidt/Uhlenbruck/Uhlenbruck, GmbH in Krise, Sanierung und Insolvenz, 5. Ed. (2016), Sidenr. 2.17 As a rule, sustainable restructuring can only be achieved through additional external financing measures.Buth/Hermanns/Kraus, Restrukturierung, Sanierung, Insolvenz, 4. Ed. (2014), Sec. 4 Sidenr. 32
(aaa) Capital increase
238The GmbHG distinguishes between the effective (Sec. 55 ff GmbHG) and the nominal (Sec. 57c ff GmbHG) capital increase. In both cases, the nominal capital figure specified in the articles of association is increased. For this purpose, in the case of a nominal capital increase, existing company funds are transferred to the share capital commitment.Vgl. Baumbach/Hueck/Zöllner/Fastrich, GmbHG, 20. Ed. (2013), Sec. 55 Sidenr. 2 This does not result in an injection of new capital, so that this form of capital increase is not very suitable for restructuring purposes.
239In the case of an effective capital increase against contributions within the meaning of Sec. 55 et seq. GmbHG, the company issues new shares and in return receives new equity capital in the form of cash or non-cash contributions. The increase in return for cash contributions leads to a direct increase in liquidity.Thierhoff/Müller/Krumbholz, Unternehmenssanierung, 3. Ed. (2022), Ch. 5 Sidenr. 6 It is therefore preferable to a capital increase against contributions in kind as a crisis management measure.Buth/Hermanns/Buth/Hermanns, Restrukturierung, Sanierung, Insolvenz, 4. Ed. (2014), Sec. 16 Sidenr. 10
240The amendment to the articles of association required for the capital increase requires a shareholder resolution with a three-quarters majority in accordance with Sec. 53 I GmbHG. The newly issued shares are then taken over by notarized or certified declaration, Sec. 55 I GmbHG. As soon as the increased capital is fully covered by the acquisition of the new shares, the shareholders' resolution must be filed for entry in the commercial register in accordance with Sec. 57 I GmbHG.
241For the shareholders, a capital increase entails the risk of Ausfallhaftung pursuant to Sec. 24 GmbHG.Baumbach/Hueck/Zöllner/Fastrich, GmbHG, 20. Ed. (2013), Sec. 55 Sidenr. 7 In order to protect against an additional dilution of their shares and, in particular, their voting rights, the existing shareholders are in principle entitled to a subscription right with regard to the newly issued shares in order to maintain their shareholding ratios. This is not explicitly regulated in the GmbHG, but results from an analogous application of Sec. 186 AktG.BGH, Judgement as of 18.4.2005 – II ZR 151/03 = NZG 2005, 551.; Baumbach/Hueck/Zöllner/Fastrich, GmbHG, 20. Ed. (2013), Sec. 55 Sidenr. 20 The subscription right may be excluded in the capital increase resolution. This measure may be necessary in order to attract new investors.Thierhoff/Müller/Krumbholz, Unternehmenssanierung, 3. Ed. (2022), Ch. 5 Sidenr. 9
(bbb) Simplified capital reduction / capital cut
242In order to attract new investors, it may also be necessary to carry out a nominal capital reduction prior to the capital increase. Such a procedure is also referred to as a capital cut.Vgl. Knops/Bamberger/Lieser/Thielemann, Recht der Sanierungsfinanzierung, 2. Ed. (2019), Sec. 10 Sidenr. 136
243The purpose of the capital reduction is to make the acquisition of new shares, which is envisaged by way of the subsequently planned capital increase, attractive to potential investors. The capital released from the share capital commitment as a result of the capital reduction is initially used to clean up the balance sheet deficits. This is purely a reorganization of the books - the liquidity of the company will not be improved by this alone.Vgl. Buth/Hermanns/Buth/Hermanns, Restrukturierung, Sanierung, Insolvenz, 4. Ed. (2014), Sec. 16 Sidenr. 8 f. However, this objective is served by the subsequent effective capital increase against contributions. The preceding nominal capital reduction prevents the capital injected by the new investors from being immediately tied up in covering losses. The interplay of both measures can thus restore or significantly improve the company's ability to act financially.
244Since in such a procedure the articles of association are amended twice with regard to the share capital figure, two different shareholders' resolutions are also required, which can, however, be combined with each other. Irrespective of the fact that a joint resolution also makes logistical sense, it offers the advantage that in this case the share capital figure can even be reduced below the minimum amount of € 25,000.00 specified in Sec. 5 I GmbHG, Sec. 58a IV 1 GmbHG, if the share capital is then also increased again to at least € 25,000.00.
(ccc) Debt-Equity-Swap
245In a debt-equity swap, creditors of the Company exchange their claim for an equity interest in the Company. The company's liabilities are thereby converted into equity.Vgl. Thierhoff/Müller/Krumbholz, Unternehmenssanierung, 3. Ed. (2022), Ch. 5 Sidenr. 29
246In practice, this is usually implemented in a similar way to the capital cut described above, by way of a nominal capital reduction followed by a capital increase in kind. The claims of the creditors are contributed as contributions in kind as part of the capital increase. The contribution in kind is made either by waiver or by way of assignment. In the latter case, the claim is extinguished by confusion.Vgl. nur Thierhoff/Müller/Krumbholz, Unternehmenssanierung, 3. Ed. (2022), Ch. 5 Sidenr. 30
247The receivables are to be valued in accordance with the provisions on the payment of contributions in kind; in the event of overvaluation, the new shareholder is threatened with subsequent liability in cash pursuant to Sec. 9 I 1 GmbHG. This risk is particularly imminent in cases of reorganization, as the receivables contributed are then no longer or less valuable due to the poor financial situation of the debtor company. A carefully documented valuation of the receivables is therefore indispensable to mitigate the risk of subsequent liability.Vgl. Thierhoff/Müller/Krumbholz, Unternehmenssanierung, 3. Ed. (2022), Ch. 5 Sidenr. 36 Well-secured creditors will generally not agree to a debt-equity swap because of the risk of subsequent liability. Such plans should therefore be aimed primarily at unsecured and subordinated creditors, who bear a high risk of loss anyway.Vgl. Thierhoff/Müller/Krumbholz, Unternehmenssanierung, 3. Ed. (2022), Ch. 5. Sidenr. 32; Schmidt/Uhlenbruck/Uhlenbruck, GmbH in Krise, Sanierung und Insolvenz, 5. Ed. (2016), Sidenr. 2.63
248A further problem of the debt-equity swap is that the subscription rights of the existing shareholders must be excluded so that the creditors can participate in the company to the desired extent.Thierhoff/Müller/Krumbholz, Unternehmenssanierung, 3. Ed. (2022), Ch. 5 Sidenr. 34 To the extent that rehabilitation cannot be achieved by other means, such exclusion is permissible, at least in material respects.Baumbach/Hueck/Zöllner/Fastrich, GmbHG, 20. Ed. (2013), Sec. 55 Sidenr. 27 However, the exclusion of subscription rights can only be formally resolved by analogous application of Sec. 186 III 2 AktG with a three-quarters majority of the share capital represented at the time the resolution is adopted.Baumbach/Hueck/Zöllner/Fastrich, GmbHG, 20. Ed. (2013), Sec. 55 Sidenr. 25 Accordingly, the existing shareholders have the opportunity to block such a step in order to preserve their shareholdings.
(ddd) Shareholder loans
249A shareholder loan improves liquidity and can thus counteract insolvency. However, the loan only grants borrowed capital and thus increases the assets but also the liabilities (repayment claim and interest claim) and is therefore not suitable for averting the threat of over-indebtedness.Thierhoff/Müller/Krumbholz, Unternehmenssanierung, 3. Ed. (2022), Ch. 5 Sidenr. 47
250The shareholders must also keep the risks of financing in mind. Although the repayment claims are exempt from the payment prohibition under Sec. 30 I GmbHG, there are nevertheless various risks in the event of insolvency.
251One risk is the subordination of repayment claims pursuant to Sec. 39 I No. 5 InsO. In the event of the failure of the reorganization and the subsequent opening of insolvency proceedings, the shareholders can, as a rule, no longer expect any (even pro rata) satisfaction due to the subordination of their repayment claims. This affects repayment claims arising from loans and claims arising from legal acts which correspond economically to such a loan, such as recourse claims of the shareholder arising from the satisfaction of a third-party creditor as guarantor.Uhlenbruck/Hirte, InsO, 15. Ed. (2019), Sec. 39 Sidenr. 48
252Loans from non-managing shareholders with an interest of 10% or less are exempt from the subordination rule (= so-called small shareholder privilege). In accordance with the so-called reorganization privilege under Sec. 39 IV 2 InsO, subordination also does not apply if the shareholder has only taken over shares in the company for the purpose of reorganization when insolvency is already imminent. The restructuring privilege applies both to loans already existing at the time of the share acquisition and to newly granted loans.
253A further risk is the contestability of repayments made after the company has become insolvent in accordance with Sec. 135 I No. 2 InsO, if these were made in the last year before the application to open insolvency proceedings was filed. Legal acts to satisfy a claim equivalent to a shareholder's claim to repayment of a loan are also voidable, e.g. payments to satisfy a recourse claim which the shareholder has obtained from the satisfaction of a third-party creditor as guarantor. Legal acts to satisfy third-party loans secured by a shareholder can also be challenged under Sec. 135 II InsO. However, the challenge is not directed against the third party creditor, but again against the shareholder. Pursuant to Sec. 135 IV InsO, the privilege of small shareholders also applies in the context of avoidance in insolvency.
(eee) Restructuring loans / increase in credit lines
254An increase in credit lines can also improve liquidity in the short term and thus contribute to restructuring. Such a measure can only be considered on the basis of a coherent restructuring conceptVgl. BGH, Judgement as of 12.5.2016 – IX ZR 65/14 = NZI 2016, 636, wonach ein Sanierungsplan nicht den formalen Erfordernissen von von z.B. IDW S 6 o.ä. entsprechen muss, laut Lenger, NZI 2016, 640 (641) jedoch die wirtschaftliche Lage des Unternehmens analysiert, Krisenursachen benannt und die Vermögenslage des Schuldners erfasst zu werden hat , on the basis of which the credit institutions or other lenders can assess the prospects of success of the restructuring efforts and thus also their own risk. They bear not only the risk of default, but also the risk of possible liability for delaying insolvency if they artificially delay the occurrence of insolvency by granting a new loan despite the lack of prospects of successful restructuring in order to gain an advantage over other creditors, who suffer losses because they incorrectly assess the financial situation of the debtor company.Thierhoff/Müller/Krumbholz, Unternehmenssanierung, 3. Ed. (2022), Ch. 5 Sidenr. 58; Schmidt/Uhlenbruck/Kuder/Unverdorben, GmbH in Krise, Sanierung und Insolvenz, 5. Ed. (2016), Sidenr. 2.419
255In order to avoid liability, lenders must comprehensively examine the prospects of success of a reorganization on the basis of the reorganization concept before granting a loan. If there are doubts about the plausibility of the concept, the granting of a loan must be investigated extremely carefully in view of the threat of liability.Vgl. Schmidt/Uhlenbruck/Kuder/Unverdorben, GmbH in Krise, Sanierung und Insolvenz, 5. Ed. (2016), Sidenr. 2.422
(fff) Deferral
256The deferral of a receivable means the postponement of its due date. Since the assessment of the (in)ability to pay depends on a comparison of receivables due and the means of payment available at the same time and since due dates can be postponed at will by means of a deferral agreement, this is a suitable means of bridging temporary liquidity bottlenecks and thus averting an inability to pay. According to Sec. 222 I 1 AO, tax claims can also be deferred if collection on the due date would mean considerable hardship for the company and the claim does not appear to be endangered by the deferral. In addition to the tax authorities, other creditors are generally only likely to agree to such an arrangement if they do not see this as reducing their chances of having their claim satisfied. It is clear that deferral, like all other debt capital measures, can only work on the basis of a sound restructuring concept.
(ggg) Debt haircut
257A debt haircut reduces the company's liabilities. Typically, creditors waive part of their liabilities on a pro rata basis, which means that this measure is suitable for averting balance sheet over-indebtedness on the one hand, and on the other hand also has a liquidity-promoting effect due to the elimination of repayment and interest obligations.Knops/Bamberger/Lieser/Lieser/Jüchser, Recht der Sanierungsfinanzierung, 2. Ed. (2019), Sec. 18 Sidenr. 1
258From a dogmatic point of view, this is a waiver or negative acknowledgement of debt in accordance with Sec. 397 of the German Civil Code. This requires a contractual agreement, which can be concluded informally. When interpreting the creditor's declarations of intent, a waiver of the claim is generally not to be assumed.Vgl. nur BGH, Judgement as of 18.4.1989 – X ZR 85/88 = NJW-RR 1989, 1373; Säcker/Rixecker/Oetker/Limperg/Schlüter, BGB, 9. Ed. (2021), Sec. 397 Sidenr. 3.; verwiesen sei hier auch auf die Auslegung nach Treu und Glauben iSd Sec. 133, 157 BGB According to Sec. 397 I BGB, the contract of remission leads to the debt being extinguished without any further action on the part of the debtor.
259The waiver can be combined with a so-called better fortune agreement, according to which the claim is to be revived upon successful reorganizationThierhoff/Müller/Krumbholz, Unternehmenssanierung, 3. Ed. (2022), Ch. 5 Sidenr. 75; Knops/Bamberger/Lieser/Lieser/Jüchser, Recht der Sanierungsfinanzierung, 2. Ed. (2019), Sec. 18 Sidenr. 33 , or with a debt-equity swap. Due to the fact that the claim has lapsed in the meantime, this is not merely a deferral, so that the waiver not only has a positive effect on the Company's solvency, but also on its over-indebtedness status.
(hhh) Subordination
260The subordination of a claim in insolvency proceedings can also be based on a corresponding agreement between the creditor and the company in accordance with Sec. 39 II InsO. The claim is then no longer to be taken into account when drawing up an over-indebtedness status, which can be helpful in averting insolvency maturity. This legal consequence results from Sec. 19 II 2 InsO, which, according to the case law of the BGH, is to be applied beyond its wording also to subordination agreements with non-partners.BGH, Judgement as of 5.3.2015 – IX ZR 133/14 = NJW 2015, 1672 In the insolvency proceedings, the respective creditors are only taken into account after the subordinated creditors pursuant to Sec. 39 I Nos. 1 to 5 InsO and should therefore, as a rule, not hope for a proportionate satisfaction.
(iii) Public sector financial assistance
261The public sector also provides financial assistance for crisis situations. When granting financial restructuring assistance, however, the state is generally subject to the general prohibition of state aid under Article 107 TFEU. The background to this is that state financing of certain companies or sectors of the economy distorts the market as such, as it allows economically inefficient companies to continue to operate as market participants, even though they would have been squeezed out by more efficient competitors without subsidies. However, the Treaties (TFEU) may also explicitly allow for exceptions. Some of these are regulated in Art 107 II, III TFEU itself. This possibility was recently used in particular in the form of the so-called Corona aid. In line with a more flexible understanding of the exemptions in Art 107 II, III TFEU, which has become more flexible as a result of the financial crisis in 2008, this aid has been recognized as compatible with the internal market. By issuing guidelines on business support, the Commission is giving more detailed form to the exemptions provided for in Article 107 TFEU. The various aid programs of the Member States must be adapted accordingly.Vgl. hierzu und für einen Überblick über die einschlägigen europarechtlichen Regelungen Thierhoff/Müller/Koch, Unternehmenssanierung, 3. Ed. (2022), Ch. 5 Sidenr. 121 ff
262Insofar as the state is linked to the company concerned as a creditor, it may participate in the restructuring measures described above like a private creditor, without such conduct with the corresponding consequences qualifying as aid within the meaning of Art 107 TFEU.Vgl. dazu näher Thierhoff/Müller/Koch, Unternehmenssanierung, 3. Ed. (2022), Ch. 5 Sidenr. 134 If financial assistance is granted contrary to the prohibition under Art. 107 TFEU, it must be reimbursed in full and with interest by the recipient in accordance with Sec. 48 and 49a VwVfG.
263Other forms of financial assistance include loans and deficiency guarantees as well as consultancy grants.Thierhoff/Müller/Koch, Unternehmenssanierung, 3. Ed. (2022), Ch. 5 Sidenr. 121 As a rule, these also link the granting of public restructuring aid to the prerequisite of a coherent and promising restructuring concept and, in addition, to the requirement of so-called "economic eligibility".Thierhoff/Müller/Koch, Unternehmenssanierung, 3. Ed. (2022), Ch. 5 Sidenr. 132 Whether there are subsidy programs that are eligible for the respective company in the individual case must always be examined on the basis of the specific circumstances.Vgl. Buth/Hermanns/Buth/Hermanns, Restrukturierung, Sanierung, Insolvenz, 4. Ed. (2014), Sec. 16 Sidenr. 56.
264However, even in cases where the above-mentioned requirements are met in principle, it should be noted that the relevant approval procedures often take a long timeButh/Hermanns/Buth/Hermanns, Restrukturierung, Sanierung, Insolvenz, 4. Ed. (2014), Sec. 16 Sidenr. 60 - time that the company in crisis generally does not have. In this respect, these financing aids are only seriously suitable in the early stages of a crisis.
(bb) Performance restructuring measures
265In addition to the financial restructuring measures described above, performance measures are also a key component of a viable and promising restructuring concept. In this context, precise knowledge of the causes of the crisis is indispensable. These are mostly in the performance and/or strategic area, which is why a financial restructuring alone is not sufficient to overcome the crisis in the long term. In addition, a strategic realignment is often required in line with the strategic weaknesses identified during the company analysis. However, the measures taken for this purpose do not usually have a short-term effect.Thierhoff/Müller/Schneider, Unternehmenssanierung, 3. Ed. (2022), Ch. 4. Sidenr. 124
266As part of the company analysis, the fundamentally high-performing parts of the company are first identified. The aim is then to improve earnings as quickly as possible by selectively strengthening precisely these areas. To achieve this, costs must be reduced and the service areas must be made more effective overall.Vgl. Thierhoff/Müller/Schneider, Unternehmenssanierung, 3. Ed. (2022), Ch. 4. Sidenr. 124 The measures that can be considered for this purpose are manifold and cannot be described in detail here. The measures that can be considered at all and which can also be effective depend to a large extent on the specific circumstances of the individual case (size of the company, object of the company, complexity, etc.). The following is a selection for orientation purposes:
- Streamlining the product portfolio by removing outdated and poorly performing products. The focus should be on strengthening the "bandwagons" from the product range.
- Optimization of marketing and sales by eliminating organizational deficits and a lack of employee competence. Improvement of customer service through digitalization and employee training with the aim of good availability and fast, comprehensive support (especially after- sales service).Vgl. Buth/Hermanns/Beutin/Ziechmann, Restrukturierung, Sanierung, Insolvenz, 4. Ed. (2014), Sec. 9 Sidenr. 10 ff.
- If possible, increase production by shortening production times. This must not be at the expense of product quality.Buth/Hermanns/Hermanns, Restrukturierung, Sanierung, Insolvenz, 4. Ed. (2014), Sec. 10 Sidenr. 16
- Review of purchasing strategy, renegotiation of prices if necessary and search for alternative suppliers.Vgl. Buth/Hermanns/Hermanns, Restrukturierung, Sanierung, Insolvenz, 4. Ed. (2014), Sec. 11 Sidenr. 15 ff
- The available personnel must be used as effectively as possible (e.g. adjustment of working hours to actual workload, vacation management to avoid idle time).Vgl. Thierhoff/Müller/Schneider, Unternehmenssanierung, 3. Ed. (2022), Ch. 4 Sidenr. 170; Buth/Hermanns/Hermanns, Restrukturierung, Sanierung, Insolvenz, 4. Ed. (2014), Sec. 10 Sidenr. 16
- - Staff reductions are not possible without further ado due to employee protection regulations. Dismissals outside the probationary period must be socially justified in accordance with Sec. 1 of the KSchG. In principle, terminations can be made on the basis of the development of the crisis, but a social selection must be carried out here, taking into account the criteria specified in Sec. 1 III KSchG. This is time-consuming and does not always result in the most suitable employees remaining in the workforce in the end. However, top performers can be excluded from the social selection, Sec. 1 III 2 KSchG.
- The management of the GmbH must be capable and willing to pursue the reorganization measures. If it is not, the management may have to be replaced. The competence for this lies in principle with the shareholders' meeting pursuant to Sec. 46 No. 5 GmbHG, unless the articles of association provide otherwise. A dismissal is possible at any time according to Sec. 38 I GmbHG, unless the articles of association link the dismissal according to Sec. 38 II GmbHG to the existence of an important reason.
(cc) Company sale
267The sale of a company as an asset deal can also be considered as a reorganization instrument outside of insolvency proceedings. In an asset deal, unlike a share deal, the shares in the company are not sold, but the assets or certain parts of the assets of the company are transferred individually to the buyer. When transferring the assets, it is important to ensure compliance with the principle of certainty under property law. The objects and rights to be transferred must be sufficiently defined and individually designated. The main advantage of the asset deal is that the healthy parts of the company can be acquired separately from the rest of the company, since the buyer can in principle choose which assets he wishes to take over and which not. However, Sec. 25 HGB (German Commercial Code), 613a BGB (German Civil Code) and 75 AO (German Tax Code) must be observed in particular, according to which the purchaser is jointly liable for all old liabilities and taxes if the company continues to operate and must also take over the employment relationships associated with the acquired part of the business. A further restriction on the freedom of organization is that the assumption of contractual relationships by the purchaser requires the consent of the respective contractual partners. In addition, it must be ensured that the legal entity is sufficiently equipped to be liquidated, as there is a risk of the asset deal being challenged in the event of the legal entity becoming insolvent.
(dd) Liquidation
268If the company cannot be restructured, an alternative may be the liquidation of the company and the legal entity. In this case, all assets are sold and all contractual relationships are terminated. With the cessation of business operations, the revenues cease to exist. Although the discontinuation is typically accompanied by a reduction in operating costs for materials, electricity, etc., existing contracts (e.g. personnel, rent) must be terminated in accordance with the statutory provisions and continue to be fulfilled until their termination. Against this background, careful planning of the liquidation is required.
(3) StaRUG-Procedure
269The StaRUG, which came into force on January 1, 2021, for the first time enables debtors to implement a restructuring concept outside of insolvency proceedings against the will of individual creditors. According to Sec. 29 I StaRUG, the basic prerequisite for access to the stabilization and restructuring framework of the StaRUG is always the threat of insolvency. However, the existence of imminent insolvency within the meaning of Sec. 18 InsO is not required in order to make use of the reorganization facilitation.Braun/Blümle/Erbe, StaRUG, 2021, vor Sec. 94 ff. Sidenr. 1 f.; Buth/Hermanns/Andres, Restrukturierung, Sanierung, Insolvenz, 5. Ed. (2022), Sec. 25 Sidenr. 195; Sonnleitner/Witfeld/Neu, Insolvenz- und Sanierungssteuerrecht, 2. Ed. (2022), Ch. 9 Sidenr. 3; a.A. Cranshaw/Portisch, ZInsO 2020, 2561 (2576). It is disputed whether a secondary shareholder resolution is required for the notification of a restructuring project pursuant to Sec. 31 StaRUG. While the Hamburg District Court (AG Hamburg) recently affirmed this in a decisionDecision as of March 17, 2023 - 61c RES 1/23 = NZI 2023, 584. and in doing so referred to the comments of Rauhut, according to which the wording of Sec. 1 I Sentence 2 and 3 StaRUG as well as the reasoning of the law do not contain any indications that the managing directors should have the authority to give notice,NZI-Beilage 2021, 52 (54). this view can certainly be criticized. On the one hand, the notifi-cation does not have the effect of amending the Articles of Association and is still not likely to be regarded as an unusual transaction. First, the advertisement does not have the effect of amending the statute and is still unlikely to be considered an unusual transaction.Cf. Mock's comment on AG Hamburg, decision as of March 17, 2023 - 61c RES 1/23 = NZI 2023, 584 (585 ff.). The contrary view also fails to take into account the significance of Section 1 I Sentence 2 StaRUG, as this requires the management to take appropriate countermeasures against developments that could jeopardize the existence of the company. Against the background of the basically unlim-ited power of representation of the managing directors pursuant to Section 35 I Sentence 1 GmbHG, it therefore appears preferable not to require an affirmative shareholder resolution for the restructuring notification pursuant to Section 31 StaRUG. From a practical point of view, however, managing directors should obtain such a resolution for their own protection, especially since no unanimous opinion has yet been formed in case law on this issue.
270Restructuring within the meaning of Chapters 1 and 2 StaRUG is carried out by means of a restructuring plan drawn up by the company. The company can make use of various judicial instruments in a modular manner to support the restructuring efforts, or it can completely forego the involvement of the restructuring court. However, it should be noted that the plan can only be implemented against the will of individual creditors if the plan is confirmed by the court.
(a) Restructuring plan, Sec.s 2 to 28 StaRUG
(aa) Formable legal relationships
271The basic idea of the StaRUG is to develop a restructuring plan which, similar to an insolvency plan, regulates the legal relationships of the company with certain, selected creditors.S. zur konkreten Ausgestaltung die Checkliste das BMJ gem. Sec. 16 StaRUG: https://www.bmj.de/DE/Themen/FinanzenUndAnlegerschutz/Fruehwarnsysteme/checkliste.pdf;jsessionid=6C6A0A60CB7C1850218740C69C5213E1.2_cid289?__blob=publicationFile&v=3 Pursuant to Sec. 2 StaRUG, the structuring of claims established against the company as well as the structuring of rights to separate satisfaction (= those rights which would entitle to separate satisfaction in the event of the opening of insolvency proceedings) is permitted within the scope of the restructuring plan. Pursuant to Sec. 4 StaRUG, only individual claims of creditor groups requiring special protection are excluded.Morgen/Röger, StaRUG, 2. Ed. (2022), Sec. 4 Sidenr. 2
(bb) Measures
272With regard to the specific measures for structuring the affected legal relationships, the StaRUG does not set any limits. All measures described in connection with out-of-court restructuring are eligible. Pursuant to Sec. 2 III StaRUG, measures under company law may also be taken. The measures to be taken are to be specified in the formative part of the restructuring plan in accordance with Sec. 7 StaRUG. In addition, the plan shall contain in the descriptive part explanations of the considerations underlying the restructuring concept in order to enable the parties concerned to make a decision on the basis of adequate information. The minimum content of this part is derived from Sec. 6 StaRUG. Accordingly, the plan must in particular also contain a comparative calculation in the descriptive part which shows the effects of the restructuring plan on the prospects of satisfaction of the parties concerned, Sec. 6 II StaRUG.
(cc) Selection of those affected by the plan
273Unlike in insolvency proceedings, only the creditor groups to be included are affected. The effects of the plan can be limited to certain creditor groups. This is one of the strengths of the procedure. The debtor is responsible for selecting the creditors affected by the plan, but in accordance with Sec. 8 StaRUG, the debtor must make the selection on the basis of appropriate criteria. The requirements for an appropriate selection of the creditors affected by the plan are specified in Sec. 8 2 No. 1 to 3 StaRUG. Pursuant to No. 1, creditors who would probably be fully satisfied in insolvency proceedings may be excluded. These should not necessarily have to bear the burdens of the restructuring plan, as they could also expect full satisfaction in insolvency proceedings.Morgen/Knapp/Wilde, StaRUG, 2. Ed. (2022), Sec. 8 Sidenr. 11 According to No. 2, the restructuring plan may be limited to financial liabilities and major creditors. Any other differentiation deemed appropriate according to the nature of the economic difficulties and the circumstances is also permissible under this provision. According to No. 3, the plan need not be limited to individual creditors. Accordingly, the selection of the creditors affected by the plan is also appropriate if it includes all creditors with the exception of those specified in Sec. 4 StaRUG. The company shall state and explain the criteria according to which it has made the selection in the representative part of the restructuring plan.
274The creditors affected by the plan are divided into groups. Pursuant to Sec. 9 StaRUG, a distinction must be made between creditors entitled to separate satisfaction, unsecured creditors and, in the case of unsecured creditors, ordinary and subordinated creditors and, ultimately, holders of share and membership rights. A further subdivision of these mandatory groups according to economic interests is permissible in accordance with Sec. 9 II StaRUG. Since each group votes separately on the plan and the required majority () must be achieved within each group, the further formation of groups can serve to unite creditors with corresponding economic interests and thus similar expectations of the plan and thus to organize the required majorities within the groups. The formation of subgroups can therefore also be based on tactical considerations with regard to voting. In doing so, however, the company remains within the limits set by Sec. 9 II Sta-RUG, according to which the groups must be distinguished from each other according to appropriate criteria and these criteria must be stated in the plan.
(dd) Voting procedure
275The Company may choose whether to submit the plan to a vote of the creditors affected by the plan out of court or in court proceedings pursuant to Sec. 23 StaRUG (). If it opts for the out-of-court voting procedure, it shall send the offer to the creditors affected by the plan in accordance with Sec. 17 StaRUG, stating which claims or rights they are affected by, to which group they are assigned and which voting rights they have as a result. The Company shall include in the offer a reference to the fact that, in the event of acceptance by a majority and additional confirmation by the court, the plan will also have effect vis-à-vis the creditors who reject it. The vote on the plan may then take place within the framework of a meeting of the parties affected by the plan or, without such a meeting, by written procedure. In both cases, the creditors shall be granted a period of at least 14 days. In the latter case, at the request of one or more plan-affected parties, a meeting of plan-affected parties must be held to discuss the plan, Sec. 21 I StaRUG. In this way, the legislator ensures that each party affected by the plan has the opportunity to make its decision on the basis of adequate information.Morgen/Tresselt, StaRUG, 2. Ed. (2022), Sec. 17 Sidenr. 13
276The plan is adopted if at least 75 % of the voting rights from each group are attributable to the plan adoption, Sec. 25 I StaRUG. A head majority of 75 % is not required.Braun/Herzig, StaRUG, 1. Ed. (2021) Sec. 25 Sidenr. 3; Morgen/Kowalewski/Praß, StaRUG, 2. Ed. (2022), Sec. 25 Sidenr. 33 Since the quorum is not only the votes cast, but all voting rights, an abstention has the same effect on the voting result as a rejection.Vgl. Morgen/Kowalewski/Praß, StaRUG, 2. Ed. (2022), Sec. 25 Sidenr. 15 The voting weight allocated to the individual creditors is determined in accordance with Sec. 24 StaRUG. According to this, the voting weight for ordinary and secured restructuring creditors is generally determined by the value of their claim or right and for shareholders by the ratio of their share to the subscribed capital of the company, Sec. 24 I StaRUG. If the majority required under Sec. 25 StaRUG cannot be reached in individual groups, Sec. 26 StaRUG offers the possibility of a majority decision across groups. According to this, approval is deemed to have been granted even by groups that reject the plan if the members of this group would probably not be worse off as a result of the plan than they would be without the plan, they participate appropriately in the economic value that is to accrue to those affected by the plan, and overall the majority of the groups have voted in favor of the approval.Cf. the section on the ban on obstruction
277If the acceptance is not unanimous, the plan will only take effect vis-à-vis the rejecting creditors if it is confirmed by the court within the meaning of Sec. 29 II No. 4 StaRUG. However, it is advisable to obtain court confirmation even in the event of unanimous acceptance, as any defects in the will are deemed to have been cured by such confirmation pursuant to Sec. 67 VI StaRUG and the protection against avoidance pursuant to Sec. 90 StaRUG is activated.Schülke, DStR 2021, 621; Morgen/Tresselt, StaRUG, 2. Ed. (2022), Sec. 23 Sidenr. 9
(b) Judicial Stabilization and Restructuring Framework, Sec. 29 to 72 StaRUG
(aa) General / lis pendens
278Sec.s 29 et seq. StaRUG offer various instruments for judicial support of the restructuring proceedings. The company must notify the restructuring case to the restructuring court having jurisdiction and, in the course of this, inform the court of the current status of the proceedings in accordance with Sec. 31 II StaRUG. Restructuring courts are, insofar as they are also responsible for regular insolvency cases, the local courts in whose district a higher regional court has its seat. Otherwise, the restructuring court is the local court which has jurisdiction for regular insolvency cases at the seat of the higher regional court.Morgen/Hirschberger/Siepmann, StaRUG, 2. Ed. (2022), Sec. 31 Sidenr. 11; ebenda Blankenburg, Sec. 34 Sidenr. 7 ff.
279Upon notification, the restructuring case becomes legally pending pursuant to Sec. 31 III StaRUG. Various legal consequences are linked to the pendency of the restructuring case.
280Pursuant to Sec. 32 III StaRUG, if insolvency or over-indebtedness occur during the pendency of the case, the company must immediately notify the restructuring court. The obligation to file an application pursuant to Sec. 15a InsO is suspended during the legal pendency pursuant to Sec. 42 I StaRUG.
281Pursuant to Sec. 32 I 1 StaRUG, the company must carry out the restructuring with the due care and diligence of a prudent and conscientious manager and, in doing so, safeguard the interests of the creditors. If the debtor is a legal entity, this duty is incumbent on the managing directors pursuant to Sec. 43 I StaRUG. With regard to the question of whether the actions of the management meet the requirements of due care and diligence of a prudent and conscientious manager, the latter is entitled to a certain degree of discretion. The interests to be taken into account when exercising this entrepreneurial discretion are now supplemented by the interests of creditors through the provisions of Secs. 32 I, 43 I StaRUG. As of the pendency of the restructuring case, the manager must therefore always base his decision-making on the interests of creditors in order to avoid liability for breach of his management duties. Pursuant to Sec. 43 I 2 StaRUG, the managing directors are liable to the company for a breach of this duty in the amount of the loss incurred by the creditors. The required fault of the managing directors is rebuttably presumed pursuant to Sec. 43 I 2 StaRUG.
282Pursuant to Sec. 44 I StaRUG, lis pendens shall not constitute grounds for terminating contractual relationships, making payments due or for a right of the other party to refuse performance. In the event that the contracts with the debtor contain corresponding clauses, Sec. 44 II StaRUG stipulates that they are invalid.
(bb) Instruments of the stabilization and restructuring framework
283The instruments of the judicial stabilization and restructuring framework available under Sec. 29 II StaRUG are judicial plan coordination, preliminary review, stabilization and plan confirmation. An instrument for terminating existing contractual relationships was still provided for in the draft government bill, but was ultimately deleted by the legislature. This means that the StaRUG is not suitable as an alternative to conventional insolvency proceedings for many companies in financial difficulties due to the consequences of the Corona pandemic.Schülke, DStR 2021, 621
(aaa) Court plan reconciliation, Sec. 29 II Nr. 1
284The judicial plan reconciliation procedure pursuant to Sec.s 29 II No. 1, 45 f. StaRUG is the alternative to the out-of-court reconciliation procedure pursuant to Sec.s 17 to 22 StaRUG. These provisions do not apply to the judicial plan voting procedure pursuant to Sec. 23 StaRUG.
285The judicial voting procedure is carried out at the request of the Company. The Company may thus transfer the entire responsibility for the proper conduct and recording of the proceedings to the restructuring court.Vgl. Morgen/Blankenburg, StaRUG, 2. Ed. (2022), Sec. 45 Sidenr. 1 The restructuring plan and its annexes must be attached to the application. The parties affected by the plan shall be invited to a discussion and voting meeting with a notice period of at least 14 days.
286In order to ensure that the meeting runs smoothly, the Company may have questions relating to the restructuring plan which are relevant to the voting procedure, in particular those relating to the division into groups, voting rights and impending insolvency, clarified in advance at a preliminary meeting in accordance with Sec. 46 StaRUG. Pursuant to Sec. 45 IV StaRUG, Sec.s 239 to 242 InsO and Sec.s 24 to 28 StaRUG shall apply to the voting procedure.
287It is also possible to separate the discussion and voting meeting. However, such a procedure can only be considered in the sense of an accelerated procedure if a comprehensive need for discussion, for example with regard to voting rights, is already apparent beforehand.Vgl. Morgen/Blankenburg, StaRUG, 2. Ed. (2022), Sec. 45 Sidenr. 56
288In the discussion part of the meeting, amendments may still be made to the plan submitted in accordance with Sec. 240 InsO. However, since a new submission is excluded, the core of the plan may no longer be changed as a result. Therefore, for example, no new parties affected by the plan may be included and the composition of the group may be changed.Vgl. Morgen/Blankenburg, StaRUG, 2. Ed. (2022), Sec. 45 Sidenr. 42 f The voting rights for the subsequent vote are determined by reference to Sec. 45 IV StaRUG, as in the case of out-of-court voting pursuant to Sec. 24 StaRUG, from the value of the legal positions affected. If there are disagreements about the voting rights in detail, these must be resolved before the vote and, if necessary, the voting rights must be determined by the court so that there is no ambiguity about achieving the required majorities during the subsequent vote.Morgen/Blankenburg, StaRUG, 2. Ed. (2022), Sec. 45 Sidenr. 46
289With regard to the majority requirements, what has been said about the out-of-court plan vote shall apply. The result of the vote shall be recorded by the court. If the plan is adopted, the court shall give the parties affected by the plan who voted against it the opportunity to object to the plan and to demonstrate that they would be worse off as a result of the plan than if it had not been adopted. Only in this way do the affected parties retain the possibility of later being able to file an application for refusal of the plan confirmation in accordance with Sec. 64 StaRUG.
(bbb) Pre-Assesment, Sec. 29 II Nr. 2 StaRUG
290Even if the company waives the judicial plan coordination procedure and has the coordination carried out out of court, it can have such issues that are relevant for a subsequent confirmation of the plan clarified in advance in a preliminary review hearing in accordance with Sec.s 47, 48 Sta-RUG.
(ccc) Stabilization, Sec. 29 II Nr. 3 StaRUG
291The stabilization order is issued at the request of the Company, provided that the other requirements for this are met. In terms of content, the stabilization order consists of an execution freeze and a liquidation freeze, Sec. 49 I No. 1, 2 StaRUG. These can be ordered independently of each other and can be restricted to individual creditors.Bork, NZI-Beil. 2021, 38 The former prohibits or temporarily suspends enforcement measures against the Company's assets. Offsetting is not covered by this and is therefore still possible even if the enforcement stop is ordered.Morgen/Boss/Luttmann, StaRUG, 2. Ed. (2022), Sec. 49 Sidenr. 22 The realization freeze can be used to prevent creditors who are secured against the company's assets from accessing them.
292Pursuant to Sec. 50 II StaRUG, the application must be accompanied by a current draft of the restructuring plan and a financial plan for the next six months. Pursuant to Sec. 51 I StaRUG, the order is issued if the planning is conclusive and complete and there are no circumstances indicating that the planning is based on inaccurate facts, the restructuring has no prospect of success, the company is not yet threatened with insolvency or the order is not necessary to achieve the restructuring objective.
293Pursuant to Sec. 50 III StaRUG, the company must also declare whether and to what extent it is in arrears with the fulfillment of liabilities arising from employment relationships, pension commitments or tax liabilities, towards social security institutions or suppliers. In addition, the company must declare whether it has already made use of enforcement or liquidation blocks in the three years preceding the application and whether it has complied with its disclosure obligations under commercial law. In these cases, the legislator does not readily assume that the company is willing and able to align its management with the interests of creditors. Therefore, pursuant to Sec. 51 II StaRUG, the order is only issued in such cases if this is nevertheless to be expected due to further circumstances.
(ddd) Plan confirmation, Sec. 29 II Nr. 4 StaRUG
294The Company may have the adopted restructuring plan confirmed by the restructuring court. The application for this can already be made at the voting meeting, Sec. 60 I 2 StaRUG. If the vote has not taken place in the court proceedings, the court must first hold a hearing of the parties affected by the plan, Sec. 61 2 StaRUG.
295Pursuant to Sec. 63 I StaRUG, confirmation shall be refused ex officio if the company is not threatened with insolvency, if material provisions concerning the content or the procedure have been incurably violated, or if the claims assigned to the parties affected by the formative part of the plan can obviously not be met. The fact that the company is already in a state of imminent insolvency is regarded as a prerequisite for the interference with the rights of the parties affected by the plan to be considered justified and is therefore also a prerequisite for the plan to be confirmed by the courts. Violations of procedural or plan content regulations only constitute grounds for failure if they constitute a material violation. This is assumed to be the case if the infringement is likely to influence the vote on the plan. In this case, it is not necessary that a causal connection between the violation and the voting result is actually proven.Morgen/Brackmann/Langer; StaRUG, 2. Ed. (2022), Sec. 63 Sidenr. 43
296If the restructuring plan provides for new financing, confirmation must be denied if the restructuring concept on which the plan is based is inconclusive or if circumstances are known which show that the concept is not based on the actual circumstances or does not offer any reasonable prospect of success. The legislator hereby specifies the requirements for a conclusive restructuring concept and ensures that the question of whether new financing is necessary at all and whether the parties affected by the plan are not unreasonably disadvantaged by new financing is subject to judicial review.Morgen/Brackmann/Langer, StaRUG, 2. Ed. (2022), Sec. 63 Sidenr. 51 Sec. 12 StaRUG defines new financing as the commitment of loans or other credits, as well as their collateralization.
297Finally, according to Sec. 63 IV StaRUG, the confirmation of the plan must also be rejected ex officio if the acceptance was brought about by unfair means, in particular by the targeted favoring of a party affected by the plan.
298Since the court-confirmed plan, with its effects encroaching on the property protected by Article 14 of the Basic Law, also affects those affected by the plan who voted against its adoption, they must be given the opportunity to have the acceptance of the plan reviewed by legal action.Morgen/Langer/Wolf, StaRUG, 2. Ed. (2022), Sec. 64 Sidenr. 1 To do this, they must file a corresponding application with the restructuring court. This is only admissible if the affected parties have already objected to the plan in the voting procedure and have asserted that they would be worse off as a result of the plan. In the event of a court vote, they must substantiate their worse position at the voting meeting in accordance with Sec.s 38 StaRUG and 294 ZPO. The worse position is credible if it appears to be predominantly probable in view of the evidence presented.Morgen/Langer/Wolf, StaRUG, 2. Ed. (2022), Sec. 64 Sidenr. 38; BGH, Decision as of 21.10.2010 – V ZB 210/09 = NJW-RR 2011, 136
299If the admissibility requirements for the application for refusal are met, the court must refuse confirmation of the plan in accordance with the application if the applicant is likely to be worse off as a result of the plan than he would be without the plan. Pursuant to Sec. 39 I 1 StaRUG, the court must determine the circumstances relevant to the decision ex officio. However, the duty to investigate ex officio is limited to the facts made credible by the applicant.Morgen/Langer/Wolf, StaRUG, 2. Ed. (2022), Sec. 64 Sidenr. 160 Pursuant to Sec. 39 I 2 StaRUG, evidence may include in particular the examination of witnesses and the consultation of experts.
300If sufficient funds are made available in the formative part of the restructuring plan in the event that a party affected by the plan proves that it is in a worse position, the application must be rejected. The funds provided for this case must not be obviously insufficient.Morgen/Langer/Wolf, StaRUG, 2. Ed. (2022), Sec. 64 Sidenr. 145
301Pursuant to Sec. 66 StaRUG, the company and all parties affected by the plan have the right of immediate appeal against decisions of the court (regarding confirmation or refusal). However, this is only permissible for those affected by the plan against the confirmation decision if the complainant has objected to the plan in the voting procedure, has voted against the plan and has substantiated his or her disadvantage and the fact that the disadvantage cannot be compensated for by the funds made available for this case. In the event that the confirmation of the plan is rejected, the debtor company may file an immediate appeal.
302Upon confirmation of the plan, the effects stipulated in the formative part shall come into effect. These then also come into effect in relation to those parties affected by the plan who have voted against the plan.
303Procedural and will defects are cured according to Sec. 67 VI StaRUG.
304Sec. Sec. 68 I StaRUG contains a formal preservation fiction for the declarations of intent contained in the plan and aimed at the establishment of rights or the disposal of a right. The provision presumes compliance with all formal requirements (from text form to notarial certification) for the declarations of intent of the company and the parties affected by the plan included in the plan.Morgen/Backes/Arends, StaRUG, 2. Ed. (2022), Sec. 68 Sidenr. 23 However, the provision does not apply to declarations of intent by third parties.Morgen/Backes/Arends, StaRUG, 2. Ed. (2022), Sec. 68 Sidenr. 21; Braun/Bauch, StaRUG, 1. Ed. (2021), Sec. 68 Sidenr. 2 Thus, for example, assignment agreements on shares or other contracts requiring form can be effectively included in the plan, provided that only the company and consenting parties affected by the plan are involved.
305Pursuant to Sec. 68 II StaRUG, resolutions by the shareholders can also be included in the plan in a formally effective manner. The confirmation of the plan shall be deemed to be a confirmation that all preparatory measures and the resolution itself have been carried out in the correct form.
306If the company falls significantly behind with its obligations under the plan to a creditor whose claims have been deferred or waived by the plan, the claim is revived in full. This is based on the idea that the restrictions resulting for the creditors from the plan are only to be accepted by them as long as the company for its part complies with the obligations under the plan.Morgen/Arends/Backes, StaRUG, 2. Ed. (2022), Sec. 69 Sidenr. 1 Pursuant to Sec. 69 I 2 StaRUG, a significant arrears shall only be deemed to exist after the debtor has received a written reminder setting a two-week grace period. Upon commencement of insolvency proceedings against the debtor's assets, deferred and waived claims shall also be revived and may be filed in the insolvency table in accordance with the general provisions.
307The confirmed restructuring plan serves as an enforcement title for the creditors affected by the plan pursuant to Sec. 71 I StaRUG. The creditors therefore no longer need to obtain any further enforcement title in order to enforce their claims arising from the plan, but may enforce directly from the plan. The creditor can only enforce a claim that has been revived in accordance with Sec. 69 StaRUG if he can prove the reminder and the expiry of the grace period, Sec. 71 III StaRUG.
308Pursuant to Sec. 90 I StaRUG, confirmation of the plan by the court means that the provisions contained in the plan and the legal acts undertaken to implement them can only be challenged to a limited extent.
(cc) Monitoring by a restructuring officer , Sec. 73 bis 83 StaRUG
(aaa) Appointment ex officio
309For the purpose of monitoring the restructuring proceedings, the court shall appoint a restructuring officer in the cases referred to in Sec. 73 I, II StaRUG. The appointment shall be made ex officio if the rights of consumers or medium-sized, small or micro-enterprises (SME = less than 250 employees and annual turnover not exceeding 50 million or annual balance sheet total not exceeding 43 million)Empfehlung der Kommission vom 6. Mai 2003 betreffend die Definition der Kleinstunternehmen sowie der kleinen und mittleren Unternehmen, AB. (EU) L 124 v. 20.04.2003, S. 36 are affected, if the company applies for a stabilization order which, with the exception of claims exempted under Sec. 4 StaRUG, is to be directed essentially against all creditors or if the restructuring plan expressly provides for monitoring of the corresponding performance to the creditors. In individual cases, the order may be dispensed with if it is not necessary or disproportionate.
310The appointment shall also be made in accordance with subSec. 2 in cases where it is to be expected that the plan can only be implemented against the will of individual parties affected by the plan.
(bbb) Requirements for the person of the officer
311The restructuring officer must be a tax advisor, auditor, lawyer or other person with comparable qualifications who is experienced in restructuring and insolvency matters.
312Even if the appointment is made ex officio (and not at the request of the company), the company may make proposals which must in any case be taken into account by the restructuring court. The court is even bound by the company's proposal if the company submits a certificate from a qualified person stating that it meets the requirements of Sec. 51 I, II StaRUG. The certifying person must meet the same requirements as the restructuring officer. The certification does not have to state explicitly that the negative requirements of Sec. 51 I of the Restructuring Act are not met, but merely that the restructuring plan submitted by the debtor is complete and coherent. With regard to the negative conditions from paragraph 2, their non-existence must be certified without further justification.Morgen/Blankenburg, StaRUG, 2. Ed. (2022), Sec. 74 Sidenr. 86
(ccc) Tasks
313The restructuring officer has a duty of notification pursuant to Sec. 76 I StaRUG if circumstances arise which justify setting aside the restructuring case. Since Sec. 33 of the Restructuring Act requires the court to set aside the restructuring case ex officio under certain circumstances, Sec. 76 I of the Restructuring Act is intended to ensure that all information is provided which the court requires in order to be able to decide on setting aside the case.Morgen/Morgen, StaRUG, 2. Ed. (2022), Sec. 76 Sidenr. 7
314Pursuant to Sec. 76 II No. 1 StaRUG, the restructuring representative shall exercise the right to vote on the plan voting procedure. If the voting does not take place in court proceedings, he shall be responsible for the management of the meeting and the proper documentation of the voting instead of the company.
315In order to prevent ambiguities with regard to the attainment of the required majorities, the representative shall examine the legal relationships set out in the plan and, if such exist, shall work towards clarification of the voting relationships, if necessary by way of preliminary examination pursuant to Sec.s 47, 48 StaRUG.
316The court may also delegate to the restructuring officer the authority to examine the economic situation and monitor the management of the company as well as a cash management authority. The company must then provide him with the documents required for auditing and monitoring. Withdrawal of the cash management authority is a "sharp sword" and is not in line with the objective of the StaRUG, i.e. largely autonomous restructuring by the company itself.Morgen/Morgen, StaRUG, 2. Ed. (2022), Sec. 76 Sidenr. 24
317In order to preserve the company's cash management authority, but at the same time subject its payment behavior to monitoring by the reorganization officer, the court may also order the company to notify the officer of payments. It may also place payments made outside the ordinary course of business subject to the consent of the Commissioner.
318If a stabilization order has been issued, the commissioner must continuously check its conditions and, if he finds grounds for setting it aside, is obliged to enforce them.Morgen/Morgen, StaRUG, 2. Ed. (2022), Sec. 76 Sidenr. 35
(ddd) Appointment upon request
319Pursuant to Sec. 77 StaRUG, an appointment upon application is also possible. The company's right to apply is not subject to any conditions. The requirements to be met by the person appointed apply accordingly. Pursuant to Sec. 79 StaRUG, the task of the optional restructuring representative is to support the company and its creditors in the preparation and negotiation of the restructuring plan and the plan based on it.
(dd) Public announcement, Sec. 84 to 88 StaRUG
320Sec. 84 to 88 StaRUG regulate the public announcement of the restructuring matter from July 1, 2022. In contrast to insolvency proceedings, public announcements in the StaRUG proceedings are only made at the request of the company. It should be possible for the company to keep the restructuring out of the public eye.Morgen/Abel/Herbst, StaRUG, 2. Ed. (2022), Sec. 84 Sidenr. 3 If the Company wishes the restructuring matter to be publicly announced, it must submit the application in accordance with Sec. 84 I 2 StaRUG prior to the first court decision in this matter and may only withdraw an application already submitted up to this point in time.
321The place and time of the court hearings in this matter, the appointment and dismissal of a restructuring officer and all court decisions made in this matter shall then be made public, Sec. 85 I StaRUG.
322Pursuant to Sec. 86 I StaRUG, the announcement shall be made centrally and on a cross-state basis on the Internet.
323Sec. 87 StaRUG regulates the establishment of a restructuring forum through which the parties involved in the plan can contact each other and exchange information prior to the vote.
(ee) Rescission and liability law, Sec. 89 to 91 StaRUG
324Sec. 89 to 91 StaRUG protect the parties to the proceedings in the event of the failure of the restructuring from a subsequent challenge to the measures taken in the restructuring proceedings and from a claim for delay in the insolvency proceedings.Morgen/Bork, StaRUG, 2. Ed. (2022), Sec. 89 Sidenr. 1 Pursuant to Sec. 89 I StaRUG, the assumption of an immoral contribution to the delay of insolvency or the assumption that a legal act was performed with intent to disadvantage creditors cannot be based on the fact that the parties involved were aware of the pendency of the restructuring case. According to para. 2, the same applies to knowledge of insolvency and overindebtedness if these are reported but do not lead to the cancellation of the restructuring case. In this way, the legislator ensures that, for example, the granting of restructuring loans does not fail from the outset for fear of a later challenge to repayments or for fear of a claim being made on account of the immoral delaying of the insolvency.Vgl. Morgen/Bork, StaRUG, 2. Ed. (2022), Sec. 89 Sidenr. 2
325In addition, legal acts performed on the basis of a legally confirmed restructuring plan can only be challenged to a very limited extent under Sec. 90 InsO.
(ff) Employee participation / creditors' council, Sec. 92, 93 StaRUG
326The obligations of the Company towards employee representatives shall remain unaffected pursuant to Sec. 92 StaRUG.
327If all creditors are included in the group of those affected by the plan, the court may, in accordance with Sec. 93 StaRUG, appoint a creditors' advisory council to monitor and support the company in its management. The company must notify the creditors' advisory council of the utilization of the court's stabilization and restructuring framework.
(c) Restructuring Moderation, Sec. 94 to 100 StaRUG
328Even before the occurrence of imminent insolvency, the Company may file an application for the appointment of an independent reorganization facilitator.Braun/Blümle/Erbe, StaRUG, 2021, vor Sec. 94 ff. Sidenr. 1 f.; Buth/Hermanns/Andres, Restrukturierung, Sanierung, Insolvenz, 5. Ed. (2022), Sec. 25 Sidenr. 195; Sonnleitner/Witfeld/Neu, Insolvenz- und Sanierungssteuerrecht, 2. Ed. (2022), Ch. 9 Sidenr. 3; a.A. Cranshaw/Portisch, ZInsO 2020, 2561 (2576).
329The restructuring facilitator, who is experienced in restructuring, acts as a neutral mediator in the out-of-court restructuring settlement negotiations. The purpose of his appointment is that, as an experienced moderator and independent authority, he moderates the mutual interests of the parties involved so that all are prepared to conclude an out-of-court settlement.Morgen/Ziegenhagen, StaRUG, 2. Ed. (2022), Sec. 94 Sidenr. 2 This offers the possibility, especially for smaller companies, to receive professional support in the preparation of a reorganization settlement.Morgen/Ziegenhagen, StaRUG, 2. Ed. (2022), Sec. 94 Sidenr. 3 The Company can also have the negotiated settlement confirmed by the court. Pursuant to Secs. 97 III, 90 StaRUG, this means that the measures resolved in the settlement can only be challenged to a limited extent in subsequent insolvency proceedings. If the settlement is not successful, the company can make use of instruments of the stabilization and restructuring framework at any time. The court may also appoint the restructuring facilitator as restructuring officer. If this is not done, his appointment ends with the expiry of the appointment period, with his dismissal or with the appointment of another restructuring officer, Sec. 100 StaRUG.
(d) Practical example: Restructuring of a holding company
330The StaRUG offers advantages above all when the focus is on financial restructuring. In parallel with financial restructuring under the StaRUG, performance restructuring can also be carried out. However, this then follows general rules. In the example, a holding company with 4 subsidiaries was restructured (see chart).
Figure 3: Representation of the holding structure with example values to illustrate the need for restructuring
331The cause of the crisis at the holding company level was that one investment got into serious difficulties - to the point of insolvency. The losses incurred could not be absorbed by the other shareholdings and, via the holding company, threatened to jeopardize them as well. As the holding company was liable for significant parts of the liabilities of the insolvent unit, there was a need for financial restructuring at the level of the holding company to prevent the other investments from being "infected". It was not necessary to restructure contractual relationships in terms of performance or to take any personnel measures in the other units.
332With the help of a management consultant, the holding company prepared a financial plan consisting of earnings and liquidity planning as well as a draft restructuring plan and then filed the restructuring case with the restructuring court.
333As small creditors (consumers or SMEs) were also affected, a restructuring officer was appointed by the court in accordance with Sec. 73 StaRUG. During the negotiations on the restructuring plan, the main problem was the applicability of the rules on the tax treatment of the restructuring profit. The waiver by the creditors in the restructuring plan resulted in a book profit, which is in principle taxable and whose tax treatment first had to be clarified. After lengthy discussions with the responsible tax authorities, it was clarified that the requirements under Sec.s 3a EStG, 7b GewStG, 7 I, 8 I, II KStG were met, even if a performance-based restructuring in the StaRUG did not take place. This was based primarily on considerations of European law.
334After the plan was accepted by the affected parties, the plan was confirmed by the court pursuant to Sec. 63 IV StaRUG. The plan quota was paid out.
(4) Debtor-in-possesion management, Sec. 270 ff. InsO
(a) General, objective of Debtor-in-possesion management
335The prerequisite for access to the Debtor-in-possesion management proceedings is the existence of a reason for insolvency (for more information on the reasons for insolvency).
336The objective of the proceedings is basically the self-organization of the legal entity.Braun/Riggert, InsO, 9. Ed. (2022), Sec. 270 Sidenr. 1 Auch wenn dies das vorrangige Ziel ist, bleiben alle anderen Wege, die zu einer Besserstellung der Gläubiger führen, zulässig, da die Rechtsträgersanierung nicht zu Lasten der Gläubiger gehen darf.BT-Dr. 19/24181, 204; Fridgen/Geiwitz/Göpfert/Ellers, BeckOK Insolvenzrecht, 26. Edition (2022), Sec. 270 Sidenr. 4 Thus, if the creditors would be worse off with a restructuring of the legal entity than without, the implementation of such a restructuring is ruled out.
337For a long time, the advantage of court proceedings over out-of-court restructuring was that the Insolvency Code offered exclusive opportunities to implement a restructuring concept even against the will of individual creditors.Thierhoff/Müller/Oberle, Unternehmenssanierung, 3. Ed. (2022), Ch. 10 Sidenr. 98 However, this advantage is now also offered to a certain extent by the StaRUG.
338However, if the company is already insolvent or overindebted, it has no other option than to enter into insolvency proceedings (on liability and criminal law aspects). However, if Debtor-in-possesion management is ordered, the company retains the possibility of disposing of the assets itself, in deviation from the principle of Sec. 80 I InsO, which regulates the transfer of the right of administration and disposition to the insolvency administrator (more on third-party administration). This, in turn, is the central advantage of Debtor-in-possesion management compared to standard insolvency proceedings.Thierhoff/Müller/Oberle, Unternehmenssanierung, 3. Ed. (2022), Ch. 10 Sidenr. 97 By retaining the power of disposal, the loss of reputation typically associated with filing for insolvency can be mitigated, as the company itself can maintain and shape business relationships with suppliers and customers instead of having to hand over this task to an insolvency administrator. In this way, the entrepreneurial knowledge available on the part of the company can also be used for the restructuring process.Vgl. Thierhoff/Müller/Oberle, Unternehmenssanierung, 3. Ed. (2022), Ch. 10 Sidenr. 97 However, this only makes sense if the company has not fallen into crisis due to previous mismanagement and has thus ultimately shown that this very knowledge is not available at all.Vgl. Uhlenbruck/Zipperer, InsO, 15. Ed. (2019), Sec. 270 Sidenr. 5 The order of Debtor-in-possesion management is therefore subject to strict conditions, the fulfillment of which requires the Company to demonstrate that it is "worthy of D. Debtor-in-possesion management" in the first place.Vgl. Braun/Riggert, InsO, 9. Ed. (2022), Sec. 270 Sidenr. 2
(b) Application for the opening of insolvency proceedings
339Since the Debtor-in-possesion management proceedings are also insolvency proceedings and, pursuant to Sec. 13 I 1 InsO, can only be opened upon application, the filing of such an application is mandatory. .
(aa) General
340The application may be filed by the company itself or by a creditor. In the case of a GmbH, the managing directors are entitled to file an application under Sec. 15 I 1 InsO (and are even obliged to do so under Sec. 15a InsO). If the GmbH is without a managing director, the body which has the authority to appoint a managing director and thus bears the responsibility for eliminating the lack of management is entitled and obliged.
341The application must be made in writing, i.e. it must be signed by the applicant or a procedural representative.Uhlenbruck/Wegener, InsO, 15. Ed. (2019), Sec. 13 Sidenr. 62 The latter must prove their legitimacy.Uhlenbruck/Wegener, InsO, 15. Ed. (2019), Sec. 13 Sidenr. 73 Authorized signatories per se are not entitled to file applications.Uhlenbruck/Wegener, InsO, 15. Ed. (2019), Sec. 13 Sidenr. 73 Representatives entered in the Commercial Register do not have to provide separate proof of their power of representation.Uhlenbruck/Wegener, InsO, 15. Ed. (2019), Sec. 13 Sidenr. 74 The application cannot be made subject to a condition or limited in time.Braun/Sorg, InsO, 9. Ed. (2022), Sec. 13 Sidenr. 9; Stürner/Eidenmüller/Schoppmeyer/Vuia, InsO, 4. Ed. (2019), Sec. 13 Sidenr. 72 The applicant (in the case of third-party applications) and the company concerned must be clearly identifiable and have a serviceable address.Stürner/Eidenmüller/Schoppmeyer/Vuia, InsO, 4. Ed. (2019), Sec. 13 Sidenr. 93 If the company does not have business premises, the address of a representative of the company's corporate body must be indicated.Stürner/Eidenmüller/Schoppmeyer/Vuia, InsO, 4. Ed. (2019), Sec. 13 Sidenr. 93
342The application must be addressed to the competent insolvency court. Pursuant to Sec. 2 InsO, the local courts in whose district a regional court has its seat have subject-matter jurisdiction. However, the federal states may make other arrangements. Pursuant to Sec. 3 I InsO, the insolvency court at the company's general place of jurisdiction has local jurisdiction. In the case of a GmbH, this is determined by its registered office pursuant to Sec. 12, 17 ZPO. However, if the center of the economic activityVgl. hierzu auch das Center of Main Interest (COMI) iSd Art. 3 EuInsVO is located at another place, the insolvency court in whose district this place is located shall have jurisdiction. In case of doubt, the responsible insolvency court can be determined via the website www.insolvenzbekanntmachungen.de.
(bb) Self application
343The company's own application must be accompanied by a list of creditors. The creditors must be individualized by stating their name or company name and (business) address.Stürner/Eidenmüller/Schoppmeyer/Vuia, InsO, 4. Ed. (2019), Sec. 13 Sidenr. 106 If the company has ongoing business operations, it must provide information on the balance sheet total, sales revenues and the average number of employees in the previous financial year. Receivables of particular importance (Sec. 13 I 4 Nos. 1 to 5 InsO) shall be specially marked. The company is even obligated to this highlighting if it has applied for D. Debtor-in-possesion management, fulfills the characteristics of Sec. 22a I InsO (6 million balance sheet total, 12 million sales, 50 employees) or the appointment of a preliminary creditors' committee has been applied for. The company is obliged to separately attach to the application a declaration on the completeness and correctness of the information provided.
344The company does not have to establish or even prove the reason for opening the insolvency proceedings, but must enable the court to examine the existence of a reason for opening the insolvency proceedings by substantiating the circumstances.Braun/Sorg, InsO, 9. Ed. (2022), Sec. 13 Sidenr. 12; Stürner/Eidenmüller/Schoppmeyer/Vuia, InsO, 4. Ed. (2019), Sec. 13 Sidenr. 101 If the application is based on (imminent) insolvency, the company must provide a comprehensive explanation of its liquidity situation; if the application is based on overindebtedness, the company must present its asset status in a comprehensible manner, comparing assets and liabilities.Stürner/Eidenmüller/Schoppmeyer/Vuia, InsO, 4. Ed. (2019), Sec. 13 Sidenr. 102 f
345If necessary, it is advisable to use a form. These can be found at some insolvency courts on their websites.
(cc) Third-party application
346The application of a creditor is admissible under Sec. 14 I InsO if the creditor has a legal interest in the commencement of insolvency proceedings and substantiates its claim and the grounds for commencement. Even in the case of an application by a third party, the duty of notification pursuant to Sec. 20 InsO on the part of the company may result in an obligation to declare itself in accordance with Sec. 13 InsO. However, this obligation exists only vis-à-vis the insolvency court and a court-appointed expert.Vgl. Stürner/Eidenmüller/Schoppmeyer/Vuia, InsO, 4. Ed. (2019), Sec. 20 Sidenr. 25 The company is not obliged to participate in the filing of an application by a creditor.
(c) Application for an order for Debtor-in-possesion management
347Pursuant to Sec. 270f I InsO, Debtor-in-possesion management is ordered at the request of the company. Typically, provisional Debtor-in-possesion management is already applied for with the insolvency petition. This is also only ordered upon application, although Sec. 270b InsO does not explicitly contain this requirement.Fridgen/Geiwitz/Göpfert/Ellers, BeckOK Insolvenzrecht, 26. Edition (2022), Sec. 270b Sidenr. 4 Der Antrag muss den Anforderungen des Sec. 270a InsO entsprechen.
(aa) Debtor-in-possesion management planning
348The application must be accompanied by a debtor-in-possesion management plan in accordance with Sec. 270a I InsO. Pursuant to Sec. 270a I InsO, this consists of a financial plan (again consisting of an insolvency-specific income and liquidity plan) for the next six months, a concept for the implementation of the insolvency proceedings, a description of the status of negotiations with the various creditors, a description of the precautions taken to meet obligations under insolvency law, and a description of the anticipated costs. Due to the current energy crisis, the German parliament has decided to shorten the relevant planning period to four months.BT-Dr. 20/4087; Änderungsantrag der BR zu BR-Dr. 20/2730 S. 5 The debtor can prepare the debtor-in-possesion management plan himself, but if he lacks expertise, it may be advisable to commission an external reorganization consultant to prepare it in order to avoid mistakes and the resulting rejection of the application or the subsequent revocation of debtor-in-possesion management.Thierhoff/Müller/Oberle, Unternehmenssanierung, 3. Ed. (2022), Ch. 10 Sidenr. 100
(aaa) Financial Plan
349The financial plan must show how the company will be financed in the next six months, with a well-founded indication of the sources of financing.BT-Dr. 19/24181, 204 For this purpose, all financial resources available during the forecast period must be compared with the anticipated costs. The costs incurred as a result of the insolvency proceedings must also be taken into account.Braun/Riggert, InsO, 9. Ed. (2022), Sec. 270a Sidenr. 3; Thierhoff/Müller/Oberle, Unternehmenssanierung, 3. Ed. (2022), Ch. 10 Sidenr. 102 The six-month period applies irrespective of whether provisional debtor-in-possesion management is applied for at the time of filing for insolvency or whether the application is filed shortly before the opening of insolvency proceedings.Braun/Riggert, InsO, 9. Ed. (2022), Sec. 270a Sidenr. 3 Therefore, the six months following the application for debtor-in-possesion management must always be presented. As part of the current efforts of the legislator, the planning period is reduced to four months.
(bbb) Implementation concept
350Based on an analysis of the causes of the crisis, the implementation plan must then set out the objective of debtor-in-possesion management and the measures required to achieve it. In addition to the reorganization of the company, a transferring reorganization or, in exceptional cases, the liquidation of the legal entity may be provided for as the objective of the procedure.BT-Dr. 19/24181, 204 The larger the company and the more complex the object of the company, the more detailed the implementation concept must be so that the court can assess its conclusiveness.See Fn. 180
(ccc) Presentation of the state of negotiations
351The presentation of the status of the negotiations shall be suitable to provide the court with an overview thereof. It is not necessary to quantify the restructuring contributions promised by the creditors in detail, since the presentation, as well as the entire remaining application, is subject to the right of the parties to inspect the file and a disclosure of the status of the negotiations to date associated therewith could complicate the further negotiations in each case.BT-Dr. 19/24181, 205; Thierhoff/Müller/Oberle, Unternehmenssanierung, 3. Ed. (2022), Ch. 10 Sidenr. 104; Fridgen/Geiwitz/Göpfert/Kreutz/Ellers, BeckOK Insolvenzrecht, 26. Edition (2022), Sec. 270a Sidenr. 15
352If no negotiations have taken place, the court shall be informed accordingly.Fridgen/Geiwitz/Göpfert/Kreutz/Ellers, BeckOK Insolvenzrecht, 26. Edition (2022), Sec. 270a Sidenr. 14 The prior commencement of negotiations is not itself a requirement for filing an application and is therefore not a prerequisite for ordering debtor-in-possesion management , although in such cases the creditors should at least be informed of the impending application so as not to take them by surprise.Vgl. Braun/Riggert, InsO, 9. Ed. (2022), Sec. 270a Sidenr. 5
(ddd) Arrangements for the performance of duties
353The presentation of the precautions taken by the Company to fulfill its obligations under insolvency law essentially consists of the Company's statement as to whether it is able to meet the requirements of debtor-in-possesion management and the insolvency law matter to be dealt with.Braun/Riggert, InsO, 9. Ed. (2022), Sec. 270a Sidenr. 6 If it lacks the necessary expertise, it must prove this by calling in external advisors. Appointing these advisors to the management board is not mandatory, but should be consideredVgl. Thierhoff/Müller/Oberle, Unternehmenssanierung, 3. Ed. (2022), Ch. 10 Sidenr. 105; Fridgen/Geiwitz/Göpfert/Kreutz/Ellers, BeckOK Insolvenzrecht, 26. Edition (2022), Sec. 270a Sidenr. 18 and is quite common in the form of a general power of attorney or the appointment of a Chief Restructuring Officer (CRO).Vgl. die z.B. die Grundsätze des Forum 270 – Qualität und Verantwortung in der Eigenverwaltung e. V.
(eee) Cost comparison
354Finally, the debtor-in-possesion management plan must contain a cost comparison between debtor-in-possesion management and the standard procedure. This is intended to ensure that debtor-in-possesion management does not represent a disadvantage for creditors. Since both the costs of the administrator and the costs of external advisors must be taken into account and, due to the greater complexity compared to liquidation, restructuring is typically associated with higher advisory costs, the advisory costs of debtor-in-possesion management can quickly exceed those of the standard procedure.Braun/Riggert, InsO, 9. Ed. (2022), Sec. 270a Sidenr. 7 The incurrence of additional costs can be counteracted by limiting the remuneration of external advisors from the outset to the difference between the administrator's remuneration and the remuneration of an insolvency administrator in third-party administration proceedings. In this way, the costs of debtor-in-possesion management are capped at the costs of the third-party administration proceedings.Braun/Riggert, InsO, 9. Ed. (2022), Sec. 270a Sidenr. 7; Thierhoff/Müller/Oberle, Unternehmenssanierung, 3. Ed. (2022), Ch. 10 Sidenr. 106; Fridgen/Geiwitz/Göpfert/Kreutz/Ellers, BeckOK Insolvenzrecht, 26. Edition (2022), Sec. 270a Sidenr. 20.1
355However, according to the explanatory memorandum to the Act, the expected value-preserving effects of debtor-in-possesion management and thus the increase in the satisfaction ratio typically associated with the preservation of the debtor company can also be included in the cost comparison, thus ultimately counteracting the assumption of a creditor disadvantage.BT-Dr. 19/24181, 205; Braun/Riggert, InsO, 9. Ed. (2022), Sec. 270a Sidenr. 7
(bb) Declarations according to Sec. 270a II InsO
356In addition to the debtor-in-possesion management plan, the company must submit the declarations pursuant to Sec. 270a II InsO with the application. According to this, the company must declare in the application whether and to what extent it is in default with the fulfillment of certain claims. In particular, these are liabilities arising from employment relationships, pension commitments or tax debt relationships, to social security institutions or suppliers. The company is only obliged to make a declaration with regard to "genuine" debtor default. This arises only under the additional conditions of Sec. 286 BGB, i.e. as a rule only with a reminder from the creditor. The debtor company does not have to make a declaration about mere payment arrears.Braun/Riggert, InsO, 9. Ed. (2022), Sec. 270a Sidenr. 8; a.A. Fridgen/Geiwitz/Göpfert/Kreutz/Ellers, BeckOK Insolvenzrecht, 26. Edition (2022), Sec. 270a Sidenr. 22a; Thole, NZI-Beil. 2021, 90 In addition, the company must declare whether enforcement or liquidation orders have been issued in its favor under the InsO or the StaRUG in the three years preceding the application, and whether it has complied with its disclosure obligations under commercial law. In the view of the legislator, the items subject to the duty to declare are indications that the company may not be willing and able to align its management with the interests of the creditors.BT-Dr. 19/24181, 204 The debtor's declarations enable the court to assess the company's suitability for creditor-friendly debtor-in-possesion management .
(d) Preliminary debtor-in-possesion management
357If the requirements are met, the court orders provisional debtor-in-possesion management for the period until the proceedings are opened. In this way, the company avoids the appointment of a preliminary insolvency administrator and can thus retain the greatest possible control over the proceedings from the outset. The appointment of a provisional administrator takes place with the order of provisional debtor-in-possesion management , Sec. 270b I InsO.
(aa) Requirements according to Sec. 270b
358The first requirement under Sec. 270b I No. 1 InsO is that the debtor-in-possesion management plan attached to the petition must be complete and coherent. There is no obligation on the part of the insolvency court to conduct an official investigation.Braun/Riggert, InsO, 9. Ed. (2022), Sec. 270b Sidenr. 5 The court therefore does not examine whether the information provided by the company in the debtor-in-possesion management plan is correct, but merely checks its conclusiveness and plausibility. Pursuant to Sec. 270c I No. 1 InsO, the court may order the temporary administrator to carry out a more detailed examination. If it turns out that the planning is based on incorrect facts, the debtor-in-possesion management must be revoked (see below for more details on the grounds for revocation under Sec. 270e InsO).
359Furthermore, pursuant to Sec. 270b I No. 2 InsO, the court must not be aware of any circumstances according to which the debtor-in-possesion management planning is recognizably based on incorrect facts. In this respect, too, there is no official duty to investigate. The court may therefore not refuse to issue the order on the grounds that it first wishes to ascertain the facts, but only if it is already aware of the relevant circumstances.BT-Dr. 19/24181, 205 If it only emerges at a later date that the debtor company has based the planning on incorrect facts in material respects, a previously ordered debtor-in-possesion management will be revoked. Debtor-in-possesion management planning therefore always requires careful preparation.
360If the court identifies remediable deficiencies in the debtor-in-possesion management planning, it may nevertheless order debtor-in-possesion management on a provisional basis and grant the company a period of no more than 20 days to rectify the situation. The order is then subject to successful and timely rectification for the duration of the rectification period. In this case, the court may order, pursuant to Sec. 270c I 2 InsO, that any dispositions by the company require the consent of the temporary administrator for the duration of the cure period.
361The order for debtor-in-possesion management may not be issued despite the fulfillment of the above-mentioned conditions if there is a contraindication pursuant to Sec. 270b II InsO. This is the case if the financial plan does not cover the costs of debtor-in-possesion management and current business operations or if the costs of debtor-in-possesion management would exceed those of third-party administration proceedings. The other cases regulated therein coincide with those of Sec. 270a II InsO, about which the company must already declare itself when filing the application (). If a case within the meaning of paragraph 2 exists, the legislator assumes that it is not to be expected without further ado that the company is willing and able to conduct the debtor-in-possesion management in the interest of the creditors.See Fn. 192 An order for debtor-in-possesion management shall only be issued if circumstances arise which are suitable to counteract this assumption and to make the contraindication less viable.See Fn. 192 In the overall view to be taken in this context, the court may not limit itself to known circumstances, but must determine all relevant circumstances.See Fn. 192 The Company may itself actively counter the contraindication by also informing the court of circumstances which are suitable to invalidate the assumption of the creditor's prejudice. In the cases referred to in paragraph 2, the decision may be taken only in consultation with the preliminary creditors' committee (if established). The court shall be bound by unanimous resolutions of the preliminary creditors' committee in this respect.
(bb) Measures within the framework of provisional debtor-in-possesion management
362The insolvency court appoints a provisional administrator. The provisional creditors' committee has the right to make a proposal. The court may deviate from a unanimous proposal of the preliminary creditors' committee only in exceptional cases if the proposed person is unsuitable, Sec. 274 I, 56a II 1 InsO. If a preliminary creditors' committee is not formed, the court shall autonomously appoint the administrator.Uhlenbruck/Zipperer, InsO, 15. Ed. (2019), Sec. 274 Sidenr. 3 Pursuant to Sec. 56 I InsO, the administrator must be independent of the debtor and the creditors. The fact that the appointment is based on a proposal and that general advice on the course of the insolvency proceedings has been given in advance is not detrimental in this respect under Sec. 56 I. In practice, the provisional administrator is frequently also appointed as administrator in the opened proceedings.
363Pursuant to Sec. 270c I InsO, the court may instruct the provisional administrator to examine the company's administration plan and the existence of liability claims against its executive bodies. This enables the court to decide on the basis of the audit result whether to lift the provisional debtor-in-possesion management pursuant to Sec. 270e I No. 1 InsO ().
364The company is obliged to notify changes with regard to the debtor-in-possesion management plan, Sec. 270c II InsO. The notification must be made to the temporary administrator and to the insolvency court. Failure to comply with this obligation constitutes grounds for annulment under Sec. 270e I No. 2a InsO (see below for more details on grounds for annulment).
365The court may order provisional protective measures under Sec. 21 I, II 1 Nos. 1a, 3 to 5 InsO.
366In addition, it may, pursuant to Sec. 270c IV, order the authorization of the company to create liabilities of the insolvency estate. These are then to be settled primarily from the insolvency estate in accordance with Sec. 53 InsO. The order is issued at the request of the company. This option was reserved for the protective shield proceedings until the amendment to the law that came into force on January 1, 2021. It should be mentioned here that the authorization cannot be granted generally, but only for individual liabilities.Braun/Riggert, InsO, 9. Ed. (2022), Sec. 270c Sidenr. 10 However, it is not necessary to submit a new application for each individual liability to be established, as the authorization can also be granted in advance for a number of specific liabilities.Braun/Riggert, InsO, 9. Ed. (2022), Sec. 270c Sidenr. 10 If the liabilities are already provided for in the finance plan, the company is entitled to the corresponding arrangement.Braun/Riggert, InsO, 9. Ed. (2022), Sec. 270c Sidenr. 11; Fridgen/Geiwitz/Göpfert/Ellers/Kreutz, BeckOK Insolvenzrecht, 26. Edition (2022), Sec. 270c Sidenr. 22 Otherwise, the company must give special reasons for its application pursuant to Sec. 270c IV InsO.
367If, in the event of imminent insolvency, the company has filed an insolvency petition and applied for debtor-in-possesion management , the court must, pursuant to Sec. 270c V InsO, if it comes to the conclusion that the requirements for debtor-in-possesion management are not met, inform the company of these considerations and give the company the opportunity to withdraw its petition. This gives the company the option of making the voluntary application subject to the condition that debtor-in-possesion management be ordered.
368In addition, the temporary administrator is obliged to supervise the management of the debtor pursuant to Sec. 270b I, 274 II InsO. In accordance with Sec. 270b I, 275 InsO, the provisional administrator is also responsible for approving and objecting to the incurrence of liabilities ().
(cc) Reasons for annulment under Sec. 270e
369Cancellation shall take place ex officio in the cases of Sec. 270e I Nos. 1 to 3 InsO; in the cases of Sec. 270e I Nos. 4-5, II InsO it shall take place only upon application. After the cancellation, the proceedings shall be continued as third party administration proceedings.Thierhoff/Müller/Oberle, Unternehmenssanierung, 3. Ed. (2022), Ch. 10 Sidenr. 113; Stürner/Eidenmüller/Schoppmeyer/Kern, InsO, 4. Ed. (2019), Sec. 272 Sidenr. 68 The insolvency court shall terminate debtor-in-possesion management ex officio if the company seriously breaches its obligations under insolvency law, fails to remedy remediable deficiencies in the debtor-in-possesion management plan within the remedial period or if the achievement of the debtor-in-possesion management objective set proves to be futile.
370The ground for annulment of the serious breach of duty is specified by the standard examples in Sec. 270e I No. 1 lit. a) to c) InsO. According to these, a serious breach of duty exists, for example, if it subsequently becomes apparent (e.g. as a result of the audit carried out by the temporary administrator pursuant to Sec. 270c I No. 1 InsO) that the company based its debtor-in-possesion management plan on materially inaccurate facts or if it fails to comply with its duty of notification pursuant to Sec. 270c II InsO. However, the list contained in Sec. 270e I No. 1 InsO is not exhaustive, so that the court can always revoke debtor-in-possesion management if it comes to the conclusion, in view of the circumstances and the debtor's conduct, that the company is not willing or able to align its management with the interests of the creditors.Thierhoff/Müller/Oberle, Unternehmenssanierung, 3. Ed. (2022), Ch. 10 Sidenr. 114; Braun/Riggert, InsO, 9. Ed. (2022), Sec. 270e Sidenr. 4; Fridgen/Geiwitz/Göpfert/Kreutz/Ellers, BeckOK Insolvenzrecht, 26. Edition (2022), Sec. 270e Sidenr. 3
371Cancellation due to failure to meet the deadline for rectification pursuant to No. 2 shall only be considered if the deadline set by the court was also reasonable.Braun/Riggert, InsO, 9. Ed. (2022), Sec. 270e Sidenr. 10
372Due to the hopelessness of achieving the objectives of the procedure, the annulment can be made only if the failure is evident.Braun/Riggert, InsO, 9. Ed. (2022), Sec. 270e Sidenr. 11 In the event of a change in the objective of the proceedings, the court must examine whether setting aside the proceedings on this basis really meets the interests of the creditors or whether these are not better served by pursuing the newly stated objective. Thus, for example, a change from the objective of an insolvency plan to a transferring reorganization may not necessarily result in a termination due to failure to achieve the objective of the proceedings if this is more in line with the interests of the creditors than a transfer to third-party administration.Vgl. Thierhoff/Müller/Oberle, Unternehmenssanierung, 3. Ed. (2022), Ch. 10 Sidenr. 114 In order to avoid setting aside for failure to achieve the objective of the proceedings, the debtor company should devote the utmost care to the presentation of the objective of the proceedings.Thierhoff/Müller/Oberle, Unternehmenssanierung, 3. Ed. (2022), Ch. 10 Sidenr. 14
(e) Debtor-in-possesion management in opened proceedings
(aa) Requirements for the order of debtor-in-possesion management
(aaa) Meeting the requirements set under Sec. 270b
373In the event of a prior order for provisional debtor-in-possesion management, the court shall examine at that point whether the prerequisites for this continue to exist. The Company must update its debtor-in-possesion management plan and bring it up to date. A renewed financial plan for a further six months is not required.Braun/Riggert, InsO, 9. Ed. (2022), Sec. 270f Sidenr. 3
(bbb) No reasons for repeal under Sec. 270e
374Pursuant to Sec. 270f I InsO, the ordering of debtor-in-possession-management also depends on whether there is a circumstance on the basis of which the provisional debtor-in-possession-management would have to be revoked pursuant to Sec. 270e InsO. Reasons for revocation under Sec. 270e InsO.
(bb) Legal status of the insolvency monitor
375The insolvency monitor is obliged to supervise the company in the exercise of its administrative and disposal powers pursuant to Sec. 275 et seq. InsO, Sec. 274 II InsO (for the specific allocation of powers, see the following section). In the event of a breach of this duty of supervision, the insolvency administrator shall be liable to the creditors in accordance with Sec. 274 I, 60 InsO. Liability for non-fulfillment of insolvency liabilities under Sec. 61 InsO is excluded due to the lack of reference to this provision in Sec. 274 I InsO.Stürner/Eidenmüller/Schoppmeyer/Kern, InsO, 4. Ed. (2019), Sec. 274 Sidenr. 76
376If ordered, the insolvency monitor shall support the company pursuant to Sec. 274 II 2 InsO in the pre-financing of the insolvency money, the accounting under insolvency law and the negotiations with customers and suppliers. This has no effect on the requirement of proof of corresponding expertise by the company itself at the time of filing the petition pursuant to Sec. 270a I No. 4 InsO.Braun/Riggert, InsO, 9. Ed. (2022), Sec. 274 Sidenr. 13
377Furthermore, pursuant to Sec. 274 III InsO, the insolvency monitor must inform the insolvency court and the creditors' committee of circumstances which give rise to the expectation that the continuation of the debtor-in-possesion management will lead to disadvantages for the creditors. Such circumstances may include, in particular, an unauthorized exercise of the powers of the insolvency administrator disregarding the restrictions pursuant to Sec. 275 et seq. InsO which disregards the exercise of the power of disposal and administration.Dazu im folgenden Abschnitt näher The notice enables the creditors to apply for the revocation of the debtor-in-possession-management or the order requiring consent.Braun/Riggert, InsO, 9. Ed. (2022), Sec. 274 Sidenr. 19; Fridgen/Geiwitz/Göpfert/Plaßmaier/Ellers, BeckOK Insolvenzrecht, 26. Edition (2022), Sec. 274 Sidenr. 29
(cc) Division of competences between debtor and insolvency monitor
378If the court orders debtor-in-possession-management after a petition for debtor-in-possession-management has been filed, the company is entitled to manage and dispose of the insolvency estate in accordance with Sec. 270 I InsO, in deviation from the principle set forth in Sec. 80 I InsO. However, it is subject to various restrictions.
(aaa) Creation of liabilities
379According to Sec. 275 I InsO, the company shall enter into liabilities only with the consent of or in agreement with the insolvency monitor. The company is therefore exempt from this obligation only in urgent cases.Uhlenbruck/Zipperer, InsO, 15. Ed. (2019), Sec. 275 Sidenr. 4 Consent in this case means exclusively the prior consent, but not the subsequent approvalSee Fn. 217
380The company may not enter liabilities that are part of the debtor's ordinary business operations if the insolvency monitor objects beforehand. Although the company is not required to obtain consentStürner/Eidenmüller/Schoppmeyer/Kern, InsO, 4. Ed. (2019), Sec. 275 Sidenr. 9; a.A. Uhlenbruck/Zipperer, InsO, 15. Ed. (2019), Sec. 275 Sidenr. 4 , it must nevertheless inform the insolvency monitor so that the latter has the opportunity to exercise his right of objection appropriately.Stürner/Eidenmüller/Schoppmeyer/Kern, InsO, 4. Ed. (2019), Sec. 275 Sidenr. 13; Uhlenbruck/Zipperer, InsO, 15. Ed. (2019), Sec. 275 Sidenr. 4 However, prior agreement on the scope of the duty to provide information is absolutely essential, as this is the only way to prevent a constant need for new coordination between the company and the insolvency monitor, which would disrupt ongoing business operations.Stürner/Eidenmüller/Schoppmeyer/Kern, InsO, 4. Ed. (2019), Sec. 275 Sidenr. 13; Fridgen/Geiwitz/Göpfert/Plaßmaier/Ellers, BeckOK Insolvenzrecht, 26. Edition (2022), Sec. 275 Sidenr. 11
381Liabilities outside the ordinary course of business, on the other hand, shall only be entered into with the prior consent of the insolvency monitor, whereby subsequent consent shall not be considered in this case either.Uhlenbruck/Zipperer, InsO, 15. Ed. (2019), Sec. 275 Sidenr. 4; Fridgen/Geiwitz/Göpfert/Plaßmeier/Ellers, BeckOK Insolvenzrecht, 26. Edition (2022), Sec. 275 Sidenr. 8; Stürner/Eidenmüller/Schoppmeyer/Kern, InsO, 4. Ed. (2019), Sec. 275 Sidenr. 15
382The distinction is made according to whether a liability is part of ordinary business operations or not. This includes all liabilities that are within the scope of the previous exchange relationships.Uhlenbruck/Zipperer, InsO, 15. Ed. (2019), Sec. 275 Sidenr. 3; Stürner/Eidenmüller/Schoppmeyer/Kern, InsO, 4. Ed. (2019), Sec. 275 Sidenr. 10 The entering into of new loan agreements and the conclusion of agreements on the sale or encumbrance of real estate always constitute liabilities requiring approval because they are outside the ordinary course of business pursuant to Sec. 275 I 1 InsO and are also subject to the provisions of Sec. 276 InsO, according to which the company must also obtain the approval of the creditors' committee.Uhlenbruck/Zipperer, InsO, 15. Ed. (2019), Sec. 275 Sidenr. 3; Stürner/Eidenmüller/Schoppmeyer/Kern, InsO, 4. Ed. (2019), Sec. 275 Sidenr. 10 The company and the insolvency monitor should also agree on this delimitation at the beginning of the debtor-in-possession-management procedure.
383Sec. 275 I merely restricts the legal ability to do, not the legal ability to do. In the event of a breach, the liabilities are therefore nevertheless validly entered into in accordance with Sec. 270 I, 164 InsO. Excluded are cases of collusion, which result in ineffectiveness under Sec. 138 BGB. The same applies to liabilities which are obviously contrary to the purpose of the insolvency. These are liabilities whose contradiction with the purpose of the insolvency must be obvious to the opposing party, such as gifts from the insolvency estate or satisfaction of claims which have not been registered.Uhlenbruck/Zipperer, InsO, 15. Ed. (2019), Sec. 164 Sidenr. 3 However, the unauthorized action of the company constitutes a breach of duty, which the insolvency monitor must report to the creditors' committee and the insolvency court pursuant to Sec. 274 III InsO.Uhlenbruck/Zipperer, InsO, 15. Ed. (2019), Sec. 275 Sidenr. 6; Stürner/Eidenmüller/Schoppmeyer/Kern, InsO, 4. Ed. (2019), Sec. 275 Sidenr. 20 The creditors could use the breach as an opportunity to apply for the termination of the debtor-in-possesion-management or for an order requiring consent under Sec. 277 InsO.Stürner/Eidenmüller/Schoppmeyer/Kern, InsO, 4. Ed. (2019) Sec. 275 Sidenr. 20
384Liabilities incurred by the company during the opening of the debtor-in-possesion-management proceedings are always liabilities of the insolvency estate pursuant to Sec. 55 I 1 InsO, even without a request by the company.Uhlenbruck/Zipperer, InsO, 15. Ed. (2019), Sec. 270 Rn 13 According to Sec. 53 InsO, their creditors are to be satisfied from the assets in priority to the insolvency creditors and the lower-ranking creditors.
(bbb) Legal acts of special significance
385In the case of legal acts of particular significance for the insolvency proceedings, the company must obtain the consent of the creditors' committee in accordance with Sec. 276 InsO. Sec. 276 InsO refers to the legal transactions listed in Sec. 160 II InsO. However, only standard examples are listed there. Overall, these are transactions of significant economic importance.Vgl. Fridgen/Geiwitz/Göpfert/Plaßmeier/Ellers, BeckOK Insolvenzrecht, 26. Edition (2022), Sec. 276 Sidenr. 2. This is not necessarily the case for all transactions outside the ordinary course of business.Stürner/Eidenmüller/Schoppmeyer/Kern, InsO, 4. Ed. (2019), Sec. 276 Sidenr. 6; K. Schmidt/Undritz, InsO, 19. Ed. (2016), Sec. 276 Sidenr. 2 Finally, Sec. 275 I InsO stipulates that the administrator's consent is required. Again, this is only a restriction in the internal relationship. Lack of consent does not lead to ineffectiveness in the external relationship, Sec. 276 2, 164 InsO. Again, the exception applies in the case of transactions that are obviously contrary to the purpose of the insolvency.Uhlenbruck/Zipperer, InsO, 15. Ed. (2019), Sec. 276 Sidenr. 6 Here, too, creditors can use a violation as a reason to apply for cancellation of the debtor-in-possession-management or for an order requiring consent pursuant to Sec. 277 InsO.Stürner/Eidenmüller/Schoppmeyer/Kern, InsO, 4. Ed. (2019), Sec. 276 Sidenr. 14; Uhlenbruck/Zipperer, InsO, 15. Ed. (2019), Sec. 276 Sidenr. 6
(ccc) Takeover of the cash management by the insolvency monitor
386Pursuant to Sec. 275 II InsO, the insolvency monitor may require the company to accept incoming payments only from him and to make payments only from him. The order is at the discretion of the insolvency monitor. It is justified if the insolvency monitor has reason to be concerned that the company is jeopardizing the interests of creditors. The insolvency monitor then acts with power of representation for the receipt and payment of funds, he has power of disposal over the debtor's accounts and can declare remission and setoff.Uhlenbruck/Zipperer, InsO, 15. Ed. (2019), Sec. 275 Sidenr. 8
387This again does not result in a restriction of the debtor's legal ability. The Company may continue to make payments with the effect of performance and receive payments with the effect of redemption.Uhlenbruck/Zipperer, InsO, 15. Ed. (2019), Sec. 275 Sidenr. 8 However, this also constitutes a breach by the company, which must be reported to the creditors in accordance with Sec. 274 III InsO and can be used by them as a reason to apply for termination of debtor-in-possession-management or for an order requiring consent in accordance with Sec. 277 InsO.
(ddd) Order of the need for consent
388Pursuant to Sec. 277 InsO, it is possible to restrict the legal capacity of the company. According to this provision, the court, at the request of the creditors' meeting, orders that certain legal transactions are only effective with the consent of the insolvency monitor. This order is also effective in the external relationship.Uhlenbruck/Zipperer, InsO, 15. Ed. (2019), Sec. 277 Sidenr. 6; Fridgen/Geiwitz/Göpfert/Plaßmeier/Ellers, BeckOK Insolvenzrecht, 26. Edition (2022), Sec. 277 Sidenr. 18 Without the required consent of the insolvency monitor, the legal transaction becomes pending invalid, which, however, can be remedied by the insolvency monitor for dispositional transactions pursuant to Sec. 184, 185 BGB, and for obligation and other legal transactions analogously pursuant to Sec. 177 I BGB.Stürner/Eidenmüller/Schoppmeyer/Kern, InsO, 4. Ed. (2020), Sec. 277 Sidenr. 43 f.; Uhlenbruck/Zipperer, InsO, 15. Ed. (2019), Sec. 275 Sidenr. 6
(eee) Existing legal relationships
389Within existing legal relationships, the company is entitled to the powers of the insolvency administrator under Sec. 103 to 128 InsO pursuant to Sec. 279 InsO. These include, in particular, the exercise of the choice of performance under Sec. 103 I InsO and the authority to terminate tenancy, leasehold and service relationships, Sec. 109, 113 InsO.Vgl. Uhlenbruck/Zipperer, InsO, 15. Ed. (2019), Sec. 279 Sidenr. 1 Here, too, however, there is the restriction that the company may only exercise these rights in agreement with the insolvency monitor. The company must therefore inform the insolvency monitor in advance about the exercise of these rights so that the insolvency monitor can exercise his right of objection appropriately, and must refrain from doing so if the insolvency monitor objects. The restriction, in turn, applies only in the internal relationship.Uhlenbruck/Zipperer, InsO, 15. Ed. (2019), Sec. 279 Sidenr. 1; Nerlich/Römermann/Riggert, InsO, 43. EL (2021), Sec. 279 Sidenr. 3 As a result, although the corresponding actions of the company are effective externally, they also trigger the duty of notification of the administrator, which may enable creditors to apply for the termination of debtor-in-possession-management or for an order requiring consent under Sec. 277 InsO.
390The exercise of rights under Sec. 120, 122, 126 InsO is subject to the consent of the insolvency monitor. The legal acts regulated therein are therefore only effective in external relations with the prior consent of the insolvency monitor.Uhlenbruck/Zipperer, InsO, 15. Ed. (2019), Sec. 279 Sidenr. 1
(fff) Claims for avoidance
391The assertion of claims for avoidance in insolvency is the sole responsibility of the insolvency monitor, Sec. 280 InsO.
(ggg) Realization of collateral
392Pursuant to Sec. 282 InsO, the company shall be entitled to dispose of items in respect of which rights to separate satisfaction exist by agreement with the insolvency monitor. With regard to the agreement, the same applies as to Sec. 279 InsO.Vgl. Uhlenbruck/Zipperer, InsO, 15. Ed. (2019), Sec. 282 Sidenr. 6
(dd) Relationship to the corporate law obligations of the management under Sec. 276a InsO
393With the opening of insolvency proceedings, not only does the company in principle lose its power of administration and disposal, but in the case of a GmbH, the shareholders also lose their power to issue instructions to the managing body (= in normal proceedings, the insolvency administrator) pursuant to Sec. 37 I GmbHG. Sec. 276a I InsO also provides for this loss of authority to issue instructions in the case of self-administration proceedings and thus brings the shareholders' possibilities of exerting influence into line for the cases of third-party and self-administration.Stürner/Eidenmüller/Schoppmeyer/Klöhn, InsO, 4. Ed. (2019), Sec. 276a Sidenr. 4 This ensures that the management is oriented towards the interests of the creditors even in the case of debtor-in-possession-management.BT-Dr. 17/5712, 52; Stürner/Eidenmüller/Schoppmeyer/Klöhn, InsO, 4. Ed. (2019), Sec. 276a Sidenr. 5; Fridgen/Geiwitz/Göpfert/Ellers, BeckOK Insolvenzrecht, 26. Edition (2022), Sec. 276a Sidenr. 2
394According to Sec. 276a, 60 to 62 InsO, the managing directors are personally liable like an insolvency administrator for the violation of insolvency-specific duties and the non-fulfillment of obligations of the insolvency estate.
(ee) Repeal
395The termination of debtor-in-possession-management is subject to the requirements of Sec. 272 InsO. It shall take place ex officio in the event of a serious breach of duty or hopelessness (in this respect, the statements made above in respect of Sec. 270e InsO shall apply mutatis mutandis).
396Cancellation shall also take place upon corresponding application pursuant to Sec. 272 I Nos. 3 to 5 InsO. The group of persons entitled to file an application includes the creditors' meeting, the company and, under additional conditions, any creditor entitled to separate satisfaction and insolvency creditor. Pursuant to Sec. 272 II InsO, a creditor's application is only admissible if it credibly demonstrates that the conditions for debtor-in-possession-management have ceased to exist and that it is threatened with significant disadvantages as a result of debtor-in-possession-management.
(5) Protective Shield Proceedings
(a) Norm Purpose
397The protective shield proceedings pursuant to Sec. 270d InsO are a special variant of provisional debtor-in-possession-management.Thierhoff/Müller/Oberle, Unternehmenssanierung, 3. Ed. (2022), Ch. 10 Sidenr. 116; Fridgen/Geiwitz/Göpfert/Ellers, BeckOK Insolvenzrecht, 26. Edition (2022), Sec. 270d Sidenr. 1 The aim of this constellation of proceedings is to enable the company to draw up a restructuring plan under the supervision of a provisional administrator within a period determined by the court, without having to fear enforcement by its creditors in the meantime. As in the case of ordinary provisional debtor-in-possession-management, the company is not subject to the restrictions on its right of administration and disposal that follow the appointment of a provisional insolvency monitor, but can exercise this right itself within the limits described above ().BT-Dr. 17/5712, 40
398The protective shield proceedings offer certain advantages compared to ordinary preliminary self-administration, but are also subject to stricter requirements.
(b) Requirements of the protective shield proceedings
(aa) Prerequisites for provisional debtor-in-possession-management
399As the protective shield proceedings are only a special form of debtor-in-possession-management, the general provisions on debtor-in-possession-management also apply here. It is therefore necessary for the company to file an application for the order of provisional debtor-in-possession-management in accordance with the requirements of Sec. 270a, 270b InsO (on the requirements for provisional debtor-in-possession-management).
(bb) Reasons for opening insolvency proceedings
400Moreover, reorganization by means of protective shield proceedings can only be considered if the company has filed an application to open insolvency proceedings on the grounds of only imminent insolvency or overindebtedness. If insolvency has already occurred, the protective shield can no longer be used. The fact that the privileges of the protective shield are only available in the event of only imminent insolvency is intended to encourage companies to file an application as early as possible.BT-Dr. 17/5712, 58; Braun/Riggert, InsO, 9. Ed. (2022), Sec. 270d Sidenr. 4 If there is a cumulative threat of insolvency and overindebtedness, the protective shield can also be applied for.Braun/Riggert, InsO, 9. Ed. (2022), Sec. 270d Sidenr. 4
(cc) Certification
401Pursuant to Sec. 270d I 1 InsO, the company must submit a certificate stating that insolvency is imminent or that the company is overindebted, which must not merely state that the company is not (yet) insolvent, but must also state positively that the company is already in a state of imminent insolvency or overindebted, since this is the earliest time at which recourse to the protective shield can be considered.Braun/Riggert, InsO, 9. Ed. (2022), Sec. 270e Sidenr. 8
402In addition, the certificate must show that the intended reorganization is not obviously hopeless. In order to substantiate this prognosis, a rough concept must be attached to the certificate, from which the key points of the planned reorganization concept can be derived.Braun/Riggert, InsO, 9. Ed. (2022), Sec. 270d Sidenr. 8 This concept must be coherent and must not be based on false facts or conclusions that violate the laws of reasoning.Vgl. Fridgen/Geiwitz/Göpfert/Ellers, BeckOK Insolvenzrecht, 26. Edition (2022), Sec. 270d Sidenr. 31
403The certificate shall be accompanied by an appropriate statement of reasons. With regard to the depth of the presentation, the issuer may be guided by the IDW Standard: Assessment of the Existence of Reasons for Opening Insolvency Proceedings (IDW S 11).Vgl. Fridgen/Geiwitz/Göpfert/Ellers, BeckOK Insolvenzrecht, 26. Edition (2022), Sec. 270e Sidenr. 24.2
404Pursuant to Sec. 270d I InsO, the submission must be made by a tax advisor, auditor, lawyer or a person with comparable qualifications who has experience in insolvency matters. Experience in insolvency matters does not have to be based on work as an insolvency administrator or trustee, but may also result from the handling of a large number of mandates relating to insolvency law.Braun/Riggert, InsO, 9. Ed. (2022), Sec. 270d Sidenr. 7 According to the explanatory memorandum to the Act, persons with comparable qualifications may include tax agents, certified accountants or nationals of an EU member state. These persons must also have experience in insolvency matters.BT-Dr- 17/5712, 40
(dd) Applications required
405The Company must file an application for commencement of insolvency proceedings and combine this with the application for an order for debtor-in-possession-management. This application must comply with the requirements of Sec. 270a InsO (). The general provisions apply with regard to the application to open insolvency proceedings (). The statement pursuant to Sec. 270d I 1 InsO can be referred to in order to explain the reason for opening insolvency proceedings.Fridgen/Geiwitz/Göpfert/Ellers, BeckOK Insolvenzrecht, 26. Edition (2022), Sec. 270d Sidenr. 16
406In addition, the Company must request that a deadline be set for the submission of an insolvency plan.
407The Company may also apply for the ordering of protective measures pursuant to Sec. 21 I, II, 1 No. 1a, 3 to 5 InsO as well as for the ordering of its authority to create liabilities of the insolvency estate (). However, these applications are not obligatory for the initiation of protective shield proceedings and can accordingly also be filed subsequently.
(c) Effects of the protective shield proceedings
(aa) Deadline for the submission of an insolvency plan
408Provided that the company comprehensively fulfills the previously explained requirements, it has a binding claim to the order of the requested protective shield proceedings pursuant to Sec. 270d I 1 InsO. The court then sets a maximum three-month deadline for the submission of an insolvency plan. Although this does not oblige the company to submit an insolvency plan, failure to do so exposes it to the risk of the opening of regular proceedings.Braun/Riggert, InsO, 9. Ed. (2022), Sec. 270d Sidenr. 13; Fridgen/Geiwitz/Göpfert/Ellers, BeckOK Insolvenzrecht, 26. Edition (2022), Sec. 270d Sidenr. 59
(bb) Security measures
409In order to ensure the success of the reorganization, the Company may apply for protective measures under Sec. 270c III, 21 I, II 1 No. 1a, 3 to 5 InsO. The protective shield essentially consists in the fact that the company has a bound claim under Sec. 270d III InsO that the insolvency court, upon its application, prohibits compulsory execution against the company's movable assets during the set period.Vgl. Fridgen/Geiwitz/Göpfert/Ellers, BeckOK Insolvenzrecht, 26. Edition (2022), Sec. 270d Sidenr. 4 This allows the company to concentrate its resources on the preparation of the insolvency plan within the submission period without having to fear compulsory enforcement.Vgl. Fridgen/Geiwitz/Göpfert/Ellers, BeckOK Insolvenzrecht, 26. Edition (2022), Sec. 270d Sidenr. 58
(cc) Authorization of the company to create liabilities of the insolvency estate
410Since the amendment to the law that came into force on January 1, 2021, the possibility for the company to establish obligations under the insolvency proceedings even before the opening of the proceedings is no longer a unique feature of the protective shield proceedings. According to Sec. 270c IV 1 InsO, this possibility now also exists outside the protective shield proceedings in the context of provisional debtor-in-possession-management. Nevertheless, this authorization can still be ordered in the protective shield proceedings. It remains the case, however, that a general authorization to establish debts of the insolvency estate cannot be considered ().
(dd) Appointment of a provisional insolvency monitor
411With regard to the provisional insolvency monitor, the comments on temporary debtor-in-possession-management apply accordingly.
412However, a significant advantage over debtor-in-possession-management continues to be the right of the company to propose the person of the insolvency monitor under Sec. 270d II 2 InsO.Vgl. Fridgen/Geiwitz/Göpfert/Ellers, BeckOK Insolvenzrecht, 26. Edition (2022), Sec. 270d Sidenr. 7; Thierhoff/Müller/Oberle, Unternehmenssanierung, 3. Ed. (2022), Ch. 10 Sidenr. 120 Pursuant to Sec. 270d II 3 InsO, the court is largely bound by this proposal. It may only deviate from it if the proposed person is obviously unsuitable. The requirements of Sec. 56 I InsO apply.Braun/Riggert, InsO, 9. Ed. (2022), Sec. 270d Sidenr. 10 The court shall give reasons in writing for a decision deviating from the Company's proposal.
(d) Cancellation of the protective shield proceedings
413The general grounds for termination pursuant to Sec. 270e InsO shall apply to the protective shield proceedings. The subsequent occurrence of insolvency does not in itself constitute grounds for termination.Braun/Riggert, InsO, 9. Ed. (2022), Sec. 270d Sidenr. 17 Nevertheless, pursuant to Sec. 270d IV 1 InsO, the Company and the insolvency monitor are obliged to notify the insolvency court without delay of the occurrence of insolvency.
414After the expiry of the set time limit, the insolvency court decides on the opening of insolvency proceedings.
(e) Practical example: Restructuring of a sales company of a globally operating wine wholesale company
415A globally active wine wholesaler with its own vineyard and winery, whose roots go back to the 17th century, was struggling with economic problems for the first time in the mid-1990s. The main reasons for this were the intensification of competition in terms of direct sales to end customers, the aging of existing customers and growing pension claims. The resulting deficits for the company, which was part of a holding company, were initially offset by income from its own subsidiaries and capital measures taken by the parent company. However, the losses could not be sustained in the long term, so that the sales company decided to file an application for the opening of insolvency proceedings in self-administration within the framework of protective shield proceedings within the meaning of Sec. 270a, 270d InsO.
416In parallel, a new managing director with experience in sales was appointed and the proceedings were accompanied by a Chief Restructuring Officer (CRO) experienced in insolvency and restructuring proceedings. A provisional creditors' committee was formed. Initial restructuring measures were initiated and the sales organization was strengthened in order to achieve the goal of no longer generating operating losses as of the opening of the proceedings. To ensure this, personnel measures were taken in accordance with Sec. 123 et seq. InsO, as a result of which 50 employees were made redundant. In addition, the sales organization was realigned by terminating superfluous sales offices, streamlining the network of sales representatives and terminating long-term debt relationships. At the same time, negotiations were held with the Pension Protection Association (PSVaG). In return for an improvement in the plan the PSV took over the pension claims so that the Company was permanently relieved of this obligation.
417The implementation of a dual-track procedure was discussed with the creditors' committee. In the end, however, it was decided against this, as the administration was essentially carried out via the parent company, but not via the insolvent sales company, and, with the exception of the sales team, no assets were held by the sales company. In addition, all trademark rights were owned by the parent company. All of this spoke against the saleability of the unit.
418The shareholder had agreed to make an appropriate plan contribution to secure the quota.
(6) Regular procedure (third-party management)
(a) General
419Pursuant to Sec. 270 II, 270a I in conjunction with 270b I InsO, debtor-in-possession-management may only be ordered if it is not evident or foreseeable that the order will be detrimental to the creditors or that the intended reorganization appears to be clearly hopeless.Reus/Höfer/Harig, NZI 2019, 57 Consequently, not every insolvency can or should be carried out in the form of debtor-in-possession-management proceedings.
420In such cases, the only remaining option is to conduct the regular proceedings.
(b) Insolvency opening proceedings
(aa) Insolvency filing
421Pursuant to Sec. 13 I 1 InsO, the proceedings shall only be opened upon application (for more details see below).
(bb) Decision on the insolvency petition
422If the application meets the admissibility requirements described under (), the court regularly commissions an expert to prepare an expert opinion on the existence of the conditions for opening insolvency proceedings. The expert's assignment includes the existence of a ground for insolvency and the question of whether there is sufficient insolvency estate to cover the costs of the insolvency proceedings (court costs, remuneration of (preliminary) insolvency administrator). In addition, the court may instruct the expert to determine further facts (e.g. center of self-employed economic activity, etc.). On the basis of this expert opinion, the court then decides whether to open insolvency proceedings.
423Pursuant to Sec. 20 I 1, 101 I 1 InsO, the managing director is obliged to provide the necessary information and submit the relevant documents even after the application has been filed.Thierhoff/Müller/Roth, Unternehmenssanierung, 3. Ed. (2022), Ch. 10 Sidenr. 53 In addition, according to Sec. 20 I 2, 97 I 2 InsO, he is also obliged to disclose facts which are suitable to establish criminal liability against him. However, according to Sec. 97 I 3 InsO, these may only be used against him in subsequent criminal proceedings with his consent. The managing director may be obliged to make an affirmation in lieu of oath, be compulsorily brought before the court and, in extreme cases, even be imprisoned in the event of serious violations of the duty to provide information and cooperate, Sec. 20 I 2, 98 InsO.
424If the assets under Sec. 54 InsO are insufficient to cover the costs of the proceedings, the application under Sec. 26 InsO is rejected for lack of assets. The costs of the proceedings consist of the court costs and the costs for the (provisional) insolvency administrator and the members of the creditors' committee. Dismissal for lack of assets can be prevented by an advance payment. However, this procedure typically only plays a role in the case of creditor applications.Vgl. Braun/Herzig, InsO, 9. Ed. (2022), Sec. 26 Sidenr. 23 A deferral of procedural costs pursuant to Sec. 4a InsO is only possible in proceedings concerning the assets of natural persons.
425If the relevant requirements are met, the court shall open the insolvency proceedings by order. If self-administration has not been applied for or if the requirements for it are not met, the court appoints an insolvency administrator, Sec. 27 I InsO. The court shall request the creditors to file their claims with the insolvency administrator within a certain period of time and to notify him of the security interests claimed in the debtor's property and rights, Sec. 28 InsO.
(cc) Provisional insolvency administration
426Depending on the case, a certain amount of time elapses between the filing of the application and the opening of proceedings. If business operations are ongoing, decisions must also be made during this phase. In order to ensure the protection of the future insolvency estate during the opening proceedings, common provisional insolvency administration has become established in the standard proceedings. According to Sec. 22 III InsO, the preliminary insolvency administrator is entitled to enter the business premises of the company and to inspect the books and other business documents. Provided that no further measures are taken, however, he is otherwise restricted to merely advising the company.Stürner/Eidenmüller/Schoppmeyer/Haarmeyer/Schildt, InsO, 4. Ed. (2019), Sec. 21 Sidenr. 48 Usually, therefore, an additional consent proviso pursuant to Sec. 21 II 1 No. 2 Alt. 2 InsO or, more rarely, a general prohibition of disposal pursuant to Sec. 21 II 1 No. 2 Alt. 1 InsO is ordered.
(aaa) Preliminary insolvency administrator
427If a reservation of consent is ordered pursuant to Sec. 21 II 1 No. 2 Alt. 2 InsO is referred to as a common preliminary insolvency administrator, as his powers are significantly less extensive than in the case of an order for a general prohibition of disposal pursuant to Sec. 21 II 1 No. 2 Alt. 1 InsO. The company may only make dispositions with the consent of the preliminary insolvency administrator, whereby the reservation of consent can also be limited to certain dispositions.Uhlenbruck/Vallender, InsO, 15. Ed. (2019), Sec. 21 Sidenr. 24 By their very nature, commitment transactions are not covered by this. The Company may continue to enter into such transactions without the involvement of the preliminary insolvency administrator.BGH, Judgement as of 21.2.2013 – IX ZR 69/12 = NZI 2013, 434 Consent pursuant to Sec. 21 II 1 No. 2 Alt. 2 InsO means, in addition to prior consent within the meaning of Sec. 183 1, 182 BGB, also subsequent approval within the meaning of Sec. 184 I, 182 BGB.Uhlenbruck/Vallender, InsO, 15. Ed. (2019), Sec. 21 Sidenr. 24; Stürner/Eidenmüller/Schoppmeyer/Haarmeyer/Schidt, InsO, 4. Ed. (2019), Sec. 21 Sidenr. 65 Dispositions made by the company without the prior consent of the provisional insolvency administrator are pendingly invalid under Sec. 185 II BGB until subsequent approval. This form of provisional insolvency administration has become established as the rule in practice, as it is less drastic than the imposition of a general prohibition on disposals and is suitable for protecting the reputation of the company while at the same time monitoring its business activities.Vgl. Uhlenbruck/Vallender, InsO, 15. Ed. (2019), Sec. 21 Sidenr. 24
(bbb) Strong preliminary insolvency administrator
428If a general prohibition of disposal is imposed on the company pursuant to Sec. 21 II 1 No. 2 Alt. 1 InsO, one speaks of a so-called strong preliminary insolvency administrator, since the power of administration and disposal of the company's assets is transferred in full to the preliminary insolvency administrator pursuant to Sec. 22 I 1 InsO. In practice, this form of provisional administration is the exception. In addition to the fact that this measure represents a considerable intervention in the company at a point in time at which it is not at all clear whether there is even a reason for opening the insolvency proceedings, the strong preliminary administration also entails liability risks for the preliminary insolvency administrator. Pursuant to Sec. 55 II 1 InsO, the provisional insolvency administrator creates obligations for the insolvency estate before he has been able to obtain an overview of the company and is personally liable in accordance with Sec. 61 InsO.Vgl. Thierhoff/Müller/Roth, Unternehmenssanierung, 3. Ed. (2022), Ch. 10 Sidenr. 61
(ccc) Provisional insolvency administrator with individual authorization
429The common preliminary insolvency administrator may be authorized by the insolvency court to create individual, previously determined liabilities of the insolvency estate in addition to the reservation of consent.Thierhoff/Müller/Roth, Unternehmenssanierung, 3. Ed. (2022), Ch. 10 Sidenr. 62
(dd) Other provisional measures
430In order to prevent further deterioration of the company's financial situation during the opening proceedings, the court may take further provisional protective measures in accordance with Sec. 21 II 1 InsO to protect the creditors.
(aaa) Preliminary Creditors' Committee, No. 1a
431The insolvency court may appoint a preliminary creditors' committee for the early participation of creditors (for example, in the appointment of the preliminary insolvency administrator).Vgl. Uhlenbruck/Vallender, InsO, 15. Ed. (2019), Sec. 21 Sidenr. 16a f. If the company has ongoing business operations and these meet two of the three size criteria under Sec. 22a I Nos. 1 to 3 InsO, the court shall be obliged to appoint a liquidator unless the appointment is disproportionate in view of the expected insolvency assets or the delay associated with the appointment would further worsen the financial position of the company. The court may only exceptionally refrain from appointing the insolvency administrator on application if there are weighty reasons for not doing so.Stürner/Eidenmüller/Schoppmeyer/Haarmeyer/Schildt, InsO, 4. Ed. (2019), Sec. 21 Sidenr. 47a The application is only admissible if potential committee members are named and their declarations of consent are enclosed.
(bbb) Enforcement barrier, No. 3
432The insolvency court may prevent individual creditors from accessing the movable assets of the insolvency estate by ordering a stay of execution pursuant to Sec. 21 II 1 No. 3 InsO. The enforcement reminder pursuant to Sec. 766 ZPO is admissible against an inadmissible enforcement measure.Fridgen/Geiwitz/Göpfert/Kopp, BeckOK Insolvenzrecht, 26. Edition (2022), Sec. 21 Sidenr. 97 Enforcement measures against immovable assets of the insolvency estate may be instituted only upon application of the preliminary insolvency administrator by the enforcement court pursuant to Sec. 30d IV ZVG.Braun/Böhm, InsO, 9. Ed. (2022), Sec. 21 Sidenr. 48
(ccc) Mail blocking, No. 4
433If there is a risk that the insolvency estate will be deprived of assets, the insolvency court may impose a postal block pursuant to Sec. 21 II 1 No. 4 InsO.Vgl. Braun/Böhm, InsO, 9. Ed. (2022), Sec. 21 Sidenr. 51 This measure is associated with a considerable encroachment on the company's postal secrecy, which is protected by the Basic Law, and is therefore only permissible if there are concrete indications that the insolvency estate is at risk.BGH, Decision as of 11.9.2003 – IX ZB 65/03 = NZI 2003, 647 The control of incoming mail is carried out by the preliminary insolvency administrator.Fridgen/Geiwitz/Göpfert/Kopp, BeckOK Insolvenzrecht, 26. Edition (2022), Sec. 21 Sidenr. 73
(ddd) Prohibition of utilization and confiscation, No. 5
434Pursuant to Sec. 21 II 1 No. 5 InsO, the insolvency court may order that assets which are of considerable importance for the continuation of the business, irrespective of whether their segregation or separation could be demanded, may not be confiscated or disposed of by the creditors secured thereon. The order presupposes that a going concern exists and also covers the immovable assets.Braun/Böhm, InsO, 9. Ed. (2022), Sec. 21 Sidenr. 61; Stürner/Eidenmüller/Schoppmeyer/Haarmeyer/Schildt, InsO, 4. Ed. (2019), Sec. 21 Sidenr. 96 The items must be of significant importance for the continuation of the business, which is to be assumed if the absence of the items would lead to a significant disruption of operations.Kübler/Prütting/Bork/Blankenburg, InsO, 85. EL (2020), Sec. 21 Sidenr. 213; Braun/Böhm, InsO, 9. Ed. (2022), Sec. 21 Sidenr. 62 These circumstances shall be presented by the preliminary insolvency administrator.Stürner/Eidenmüller/Schoppmeyer/Haarmeyer/Schildt, InsO, 4. Ed. (2019), Sec. 21 Sidenr. 99
(eee) Legal remedy
435Pursuant to Sec. 21 I 2 InsO, the Company has the right of immediate appeal against the order of protective measures pursuant to Sec. 6 InsO.
(ee) Insolvency allowance
436Wage arrears from the last three months prior to commencement of insolvency proceedings shall be settled by the Federal Employment Agency pursuant to Sec. 165 SGB III. The wage claims are ipso iure transferred to the Federal Employment Agency in accordance with Sec. 169 SGB III and can be filed as insolvency claims in accordance with Sec. 55 III 1 InsO. Payment is made only after the opening of the insolvency proceedings. In order to prevent an exodus of important employees already during the opening proceedings, the insolvency money can be financed in advance if the continuation forecast is positive.Buth/Hermanns/Saegon, Restrukturierung, Sanierung, Insolvenz, 4. Ed. (2014), Sec. 24 Sidenr. 22 The bank providing the advance financing can be secured by advance assignment of the insolvency benefit claims arising when the proceedings are opened. Pursuant to Sec. 170 IV SGB III, advance financing requires the approval of the Federal Employment Agency and must therefore always be planned in close coordination with the latter.
c) Parties to the proceedings
437In addition to the company, the parties to the proceedings are the insolvency administrator, the creditors and the insolvency court.
438The insolvency administrator is entrusted with the administration and liquidation of the insolvency estate in accordance with Sec. 80 et seq. InsO, the insolvency administrator is entrusted with the administration and liquidation of the insolvency estate and, in accordance with Sec. 1 InsO, is primarily obliged to protect the interests of the creditors. The appointment is made by the insolvency court. Once the preliminary insolvency administration has been appointed, the person appointed as preliminary insolvency administrator is generally also appointed as insolvency administrator. If a preliminary creditors' committee has been appointed, it is given the opportunity to comment pursuant to Sec. 56a I InsO. According to Sec. 56a II 1 InsO, the court may only deviate from the unanimous proposals of the preliminary creditors' committee if the proposed person is not suitable. At the first creditors' meeting following the appointment of the administrator, the creditors may elect another person as insolvency administrator. The administrator receives a standard remuneration based on the value of the assets administered, Sec. 63 I 2 InsO.
439Pursuant to Sec. 38 InsO, an insolvency creditor is anyone who has a claim to assets against the company that was established when the insolvency proceedings were opened. Excluded are persons entitled to separate satisfaction pursuant to Sec. 47 InsO (in particular owners / holders of claims). From the insolvency creditors according to Sec. 38 InsO, the Insolvency Code distinguishes the subordinated creditors according to Sec. 39 InsO and the creditors entitled to separate satisfaction according to Sec. 49 ff. In-sO. The creditors entitled to separate satisfaction shall be satisfied with priority from that object of the estate in which they can assert their right to separate satisfaction. In accordance with Sec. 52 p. 2 InsO, they participate in the proceedings as normal insolvency creditors. The lower-ranking creditors will only receive proportional satisfaction from the assets once the other creditors have been satisfied in full. Their satisfaction then takes place in the order determined by Sec. 39 I InsO. During the proceedings, the creditors are organized in the creditors' meeting and the creditors' committee. Subordinated creditors are not entitled to vote in the meeting, Sec. 77 I 2 InsO. Pursuant to Sec. 77 II 1, III No. 2 InsO, the other creditors decide on the voting rights of the creditors who are entitled to a vote, in consultation with the insolvency administrator. If no agreement is reached on this, the insolvency court shall decide in accordance with Sec. 77 II 2 InsO. The creditors' meeting appoints the creditors' committee or, if previously appointed by the insolvency court, decides on its retention, Sec. 68 I InsO. Individual committee members may also be replaced. The creditors' committee supports and monitors the insolvency administrator in his management, Sec. 69 S. 1 InsO. Individual particularly significant decisions of the insolvency administrator require the consent of the creditors' committee pursuant to Sec. 160 I 1 InsO. The creditors' meeting also decides on the closure or continuation of the company in accordance with Sec. 157 S. 1 InsO and can also instruct the insolvency administrator to draw up an insolvency plan in accordance with sentence 2. In this way, the creditors exert a decisive influence on the progress of the proceedings.
(d) Effects of the opening of proceedings
(aa) General effects
440In the case of a GmbH, the opening of insolvency proceedings constitutes a ground for dissolution pursuant to Sec. 60 I No. 4 GmbHG, which is also entered in the Commercial Register.
441With the opening of insolvency proceedings, the right of administration and disposal of the insolvency estate passes to the insolvency administrator pursuant to Sec. 80 I InsO. Dispositions of the company after the opening of insolvency proceedings are ineffective according to Sec. 81 I 1 InsO. However, Sec. 892, 893 BGB continue to apply.
442Court proceedings, as far as they concern the insolvency estate, are interrupted by the opening of proceedings according to Sec. 240 ZPO and can be taken up by the insolvency administrator or in the cases of Sec. 86 InsO by the opponent according to Sec. 85, 86 InsO.
443Pursuant to Sec. 87 InsO, the insolvency creditors may only pursue their claims in accordance with the provisions InsO. The securities obtained by enforcement measures from the period from one month before the filing of the petition until the opening of the proceedings become retroactively ineffective with the opening of the insolvency proceedings pursuant to Sec. 88 I InsO (so-called non-return bar). Satisfactions already obtained are not affected by this.Braun/Kroth, InsO, 9. Ed. (2022), Sec. 88 Sidenr. 5 Both civil law and administrative law enforcement measures fall under this non-return bar.Braun/Kroth, InsO, 9. Ed. (2022), Sec. 88 Sidenr. 1; Stürner/Eidenmüller/Schoppmeyer/Breuer/Flöther, InsO, 4. Ed. (2019), Sec. 88 Sidenr. 13 During the insolvency proceedings, all individual enforcement measures against the Company's assets are prohibited under Sec. 89 I InsO and are invalid if they are carried out in violation of this prohibition. No attachment lien arises. However, the substantive ineffectiveness of the measure does not prevent the public-law involvement.Fridgen/Geiwitz/Göpfert/Cymutta, BeckOK Insolvenzrecht, 26. Edition (2022), Sec. 89 Sidenr. 27b The object of execution may be effectively disposed of on the basis of the entanglement.Fridgen/Geiwitz/Göpfert/Cymutta, BeckOK Insolvenzrecht, 26. Edition (2022), Sec. 89 Sidenr. 29a; Uhlenbruck/Mock, InsO, 15. Ed. (2019), Sec. 89 Sidenr. 44 The insolvency administrator can draw the proceeds from the sale to the insolvency estate via Sec. 812 et seq. BGB to the insolvency estate.
444According to Sec. 94 InsO, a set-off situation already existing at the opening of proceedings is not affected by the insolvency proceedings. Sec. 95 of the InsO also protects those creditors who, up to the opening of proceedings, could legitimately assume that they would be able to satisfy their claims by means of a set-off situation arising at a later date.Braun/Lojowsky, InsO, 9. Ed. (2022), Sec. 95 Sidenr. 1; Fridgen/Geiwitz/Göpfert/Liefke, BeckOK Insolvenzrecht, 26. Edition (2022), Sec. 95 Sidenr. 1 Accordingly, if at the opening of proceedings the claim(s) to be set off were still subject to conditions precedent or not yet due, or if the claims were not yet directed to similar performance, the set-off situation may also arise during the proceedings and then be used for satisfaction. If there is no case of Sec. 95 InsO, the set-off is excluded by Sec. 96 I No. 1, 2 InsO, if the set-off situation arises only after the opening of proceedings.Braun/Lojowsky, InsO, 9. Ed. (2022), Sec. 96 Sidenr. 1 Pursuant to Nos. 3 and 4, it is also excluded if the possibility of set-off was obtained in a contestable manner or if the main claim of the company is to be paid to the insolvency estate but the counterclaim of the creditor is to be met from the free assets of the company. The restriction of the right of set-off is intended to ensure the principle of equal satisfaction of creditors, as is the prohibition of enforcement.Braun/Lojowsky, InsO, 9. Ed. (2022), Sec. 96 Sidenr. 1
(bb) Existing legal transactions
445With regard to existing mutual contracts which have not yet been completely fulfilled by both parties at the opening of proceedings, the insolvency administrator may, pursuant to Sec. 103 I InsO, in principle choose whether to fulfill them or not. If he decides in favor of performance, he must effect the performance owed from the assets of the insolvency estate and may in return draw the performance owed by the creditor from the assets of the insolvency estate. If he waives performance, no further exchange of performance takes place.
446For certain legal transactions, Sec. 104 et seq. InsO contain special provisions.Vgl. Buth/Hermanns/Saegon, Restrukturierung, Sanierung, Insolvenz, 4. Ed. (2014), Sec. 24 Sidenr. 63 Fixed-term and financial futures transactions are excluded from the insolvency administrator's right of choice. Here, ex lege, only claims for non-performance can be asserted. This provision is intended to give creditors the opportunity to indemnify themselves by concluding hedging transactions at an early stage.Buth/Hermanns/Saegon, Restrukturierung, Sanierung, Insolvenz, 4. Ed. (2014), Sec. 24 Sidenr. 63 Creditors entitled to reservation of title are protected by the fact that they can demand satisfaction from the insolvency estate pursuant to Sec. 106 I 1 InsO. The same applies under Sec. 107 I 1 InsO to the person who has purchased an item from the company subject to retention of title. Secs. 106 and 107 InsO thus bring the protection of the person entitled to reservation of title and the holder of the expectant right closer to that of the person entitled in rem (who is entitled to separate satisfaction).Vgl. Buth/Hermanns/Saegon, Restrukturierung, Sanierung, Insolvenz, 4. Ed. (2014), Sec. 24 Sidenr. 63
447The insolvency administrator's right of choice is also excluded under Sec. 108 I 1 InsO in respect of tenancies and leases of immovable property or premises and employment relationships of the debtor. The resulting liabilities must initially continue to be serviced from the insolvency estate. If the company was a tenant or lessee, the insolvency administrator may terminate the contract in accordance with Sec. 109 InsO. Employment contracts may be terminated by the insolvency administrator with a maximum notice period of three months in accordance with Sec. 113 InsO.
(cc) Insolvency avoidance
448The instrument of avoidance in insolvency enables the insolvency administrator to reverse asset transfers that have led to a reduction of the future insolvency estate prior to the opening of proceedings and thus to a disadvantage of the creditors as a whole after the opening of insolvency proceedings.Vgl. BT-Dr. 12/2443, 156 By reversing the satisfaction of individual preferred creditors and drawing the displaced assets back to the insolvency estate, the insolvency administrator can achieve the goal of equal satisfaction of all creditors.
449The basic prerequisite for any action for avoidance is that the creditors are disadvantaged. Only legal acts and omissions that have led to such a disadvantage can be challenged at all under Sec. 129 I InsO. Intentional disadvantage is not mandatory, but only a prerequisite for individual acts of avoidance. Creditors are disadvantaged if their satisfaction is shortened, thwarted, made more difficult or delayed.BT-Dr. 12/2443, 157
450The other prerequisites for avoidance result from the individual circumstances of avoidance under Sec. 130 et seqq. InsO. Accordingly, depending on the protection afforded to the opposing party, the avoidance periods may extend back up to ten years (in the case of intentional prejudice to creditors pursuant to Sec. 133 I InsO) prior to the filing of the application.Vgl. Buth/Hermanns/Saegon, Restrukturierung, Sanierung, Insolvenz, 4. Ed. (2014), Sec. 24 Sidenr. 65 According to Sec. 140 I InsO, whether a legal act falls within the contestable period is determined by the occurrence of its legal effects. In addition to the question of the temporal distance between the contestable legal act and the opening of proceedings, the contestable acts also differ in particular with regard to the subjective prerequisites, such as knowledge of the insolvency, the filing of the application or the disadvantage to the creditors.Vgl. Buth/Hermanns/Saegon, Restrukturierung, Sanierung, Insolvenz, 4. Ed. (2014), Sec. 24 Sidenr. 65
451Pursuant to Sec. 131 InsO, the insolvency administrator may challenge legal acts which, in the period of up to three months prior to the filing of the petition, have granted a creditor satisfaction or security which the creditor was not entitled to, or was not entitled to in the manner or at the time (so-called incongruent cover). This also includes, for example, cover obtained by way of compulsory enforcement or payments made by the company under pressure of enforcementVgl. nur BGH, Judgement as of 23.3.2006 – IX ZR 116/03 = NJW 2006, 1870; BGH, Judgement as of 28.2.2008 – IX ZR 213/06 = NZI 2008, 297; Stürner/Eidenmüller/Schoppmeyer/Kayser/Freudenberg, InsO, 4. Ed. (2019), Sec. 131 Sidenr. 26; Uhlenbruck/Borries/Hirte, InsO, 15. Ed. (2019), Sec. 131 Sidenr. 60 or a threatened insolvency petition.BGH, Judgement as of 11.4.2002 – IX ZR 211/01 = NJW 2002, 2568; Uhlenbruck/Borries/Hirte, InsO, 15. Ed. (2019), Sec. 131 Sidenr. 63; Stürner/Eidenmüller/Schoppmeyer/Kayser/Freudenberg, InsO, 4. Ed. (2019), Sec. 131 Sidenr. 26c Within one month prior to the filing of the petition, incongruent acts of coverage may be contested without the occurrence of further preconditions. If the contested legal act is performed within the second or third month prior to the filing of the application, the insolvency administrator must prove the insolvency or the creditor's knowledge of the creditor's disadvantage.
452Congruent acts of coverage, i.e. those which the creditor was entitled to claim in exactly the same way and also at that time on a contractual basisVgl. BT-Dr. 12/2443, 157; Uhlenbruck/Borries/Hirte, InsO, 15. Ed. (2019), Sec. 130 Sidenr. 5; Braun/Bra, InsO, 9. Ed. (2022) Sec. 130 Sidenr. 9 are only contestable under the stricter conditions of Sec. 130 InsO if, in addition, the company was already insolvent at that time and the creditor was aware of the insolvency. In the case of persons related to the company, such knowledge is presumed pursuant to Sec. 130 III, 138 InsO. Like Sec. 131 InsO, Sec. 130 InsO is not limited to legal acts of the company.
453In contrast to Sec. 130, 131 InsO, avoidance under Sec. 132 InsO does not exclusively concern legal acts to satisfy or secure a previously established liability, but also the original entering into of a liability by the company.Vgl. Uhlenbruck/Borries/Hirte, InsO, 15. Ed. (2019), Sec. 132 Sidenr. 1 The facts of avoidance are thus directed in particular at the avoidance of contracts which were concluded in the three-month period prior to the filing of the application and which entail a direct disadvantage for the creditors.Vgl. Uhlenbruck/Borries/Hirte, InsO, 15. Ed. (2019), Sec. 132 Sidenr. 2
454Even outside the three-month period, a rescission is possible under Sec. 133 InsO if the company acted with the intent to disadvantage the creditors and the other party was aware of this intent. Contrary to the previous case law of the Federal Court of JusticeVgl. nur BGH, Judgement as of 14.9.2017 – IX ZR 3/16 = NZI 2018, 114 , the assumption of intent to disadvantage can now no longer be based solely on the fact that the company acted with knowledge of its own insolvency. In addition, it must also be established on the basis of the objective circumstances that the Company in any case reasonably expected that it would not be able to satisfy its other creditors in the future either.BGH, Judgement as of 6.5.2021 – IX ZR 72/20 = NZI 2021, 720 Knowledge of the other party is presumed under Sec. 133 I 2 InsO if the other party knew that the insolvency of the company was at least imminent and that the legal act disadvantaged the creditors. In the event that the assumption of intent to disadvantage is based on the recognized insolvency, for full proof of the other party's knowledge, the other party must have known according to the objective circumstances that the company would not be able to satisfy its other creditors in the future either.BGH, Judgement as of 6.5.2021 – IX ZR 72/20 = NZI 2021, 720 If the contested legal act is a (congruent or incongruent) covering act, the contestation period under Sec. 133 II InsO is four years. In this case, in deviation from Sec. 133 I 2 InsO, the knowledge of the other party is only presumed if, instead of the impending insolvency, the other party knew that the insolvency of the company had occurred. The sole scope of application of para. 1 with an even longer contestation period of ten years is thus limited to cases in which the contested legal act does not qualify as a covering act within the meaning of para. 2.
455Pursuant to Sec. 134 InsO, services rendered free of charge by the company in the four years preceding the filing of the petition may also be contested. Since the creditor does not require any special protection in this respect due to the gratuitousness, the avoidance can take place without the addition of further preconditions, whereby according to Sec. 134 II InsO an avoidance is excluded for customary gifts of low value.
456Sec. 135 InsO regulates the avoidance of collateral and satisfaction of shareholder loans. Pursuant to Sec. 1, the satisfaction or collateralization of a shareholder loan as well as the satisfaction or collateralization of an equivalent claim are contestable. Equated claims in this sense are, for example, the shareholder's recourse claim arising from his claim as guarantor.BGH, Judgement as of 6.5.2021 – IX ZR 72/20 = NZI 2021, 720 Paragraph 1 thus secures the subordination of the loan claim and the shareholder's recourse claim under Sec. 39 I 1 No. 5 InsO. The contestable period for the security extends over a period of ten years prior to the filing of the application, the contestable period for the satisfaction is one year prior to the filing of the application. Pursuant to subsection 2, the satisfaction of a third-party loan secured by a shareholder may also be contested. The object of avoidance is the release of the shareholder from his obligation to provide security.Fridgen/Geiwitz/Göpfert/Prosteder/Dachner, BeckOK Insolvenzrecht, 26. Edition (2022), Sec. 135 Sidenr. 49 Para. 2 thus transfers the priority of liability of the shareholder security from Sec. 44a InsO to the last year before the filing of the insolvency petition.Vgl. Fridgen/Geiwitz/Göpfert/Prosteder/Dachner, BeckOK Insolvenzrecht, 26. Edition (2022), Sec. 135 Sidenr. 2, 48
457What has been obtained by the voidable legal act must be returned to the insolvency estate in accordance with Sec. 143 InsO. If the prerequisites for avoidance are met, the claims arise upon commencement of the insolvency proceedingsButh/Hermanns/Saegon, Restrukturierung, Sanierung, Insolvenz, 4. Ed. (2014), Sec. 24 Sidenr. 71 and are subject to the standard limitation period under the German Civil Code (BGB) pursuant to Sec. 146 I InsO.
(dd) Administration and liquidation of the insolvency estate
458After the opening of insolvency proceedings, the insolvency administrator takes possession of and administers the assets pursuant to Sec. 148 I InsO. The further progress of the proceedings is largely determined by the creditors, since according to Sec. 157 S. 1 InsO they decide in the creditors' meeting whether the company's operations are to be shut down or continued. They can also instruct the insolvency administrator to draw up an insolvency plan in accordance with Sec. 157 S. 2 InsO. If no insolvency plan is drawn up or if the creditors are in favor of liquidation of the company, the assets belonging to the estate shall be liquidated by the insolvency administrator in accordance with Sec. 159 InsO.Vgl. Buth/Hermanns/Saegon, Restrukturierung, Sanierung, Insolvenz, 4. Ed. (2014), Sec. 24 Sidenr. 57 The insolvency administrator must sell at least at fair market prices in order to comply with the principle of best possible satisfaction of creditors in this respect.Vgl. Buth/Hermanns/Saegon, Restrukturierung, Sanierung, Insolvenz, 4. Ed. (2014), Sec. 24 Sidenr. 56 Pursuant to Sec. 160 InsO, he must coordinate particularly important legal acts with the creditors' committee. Separation rights do not prevent the liquidation by the insolvency administrator if the administrator has the collateral in his possession, Sec. 166 I InsO. The creditor entitled to separate satisfaction pursuant to Sec. 170 I InsO must be satisfied immediately from the proceeds of the liquidation after withdrawal of the costs.
459Participation in the insolvency proceedings and in the distribution of the insolvency estate requires on the part of the creditor the written filing of the claim with the insolvency administrator, Sec. 174 I 1 InsO. At the verification meeting, the parties to the proceedings have the opportunity to contest the existence of individual claims in accordance with Sec. 176 InsO. Insofar as an objection is not raised or an objection that has been raised is removed, the claims are deemed to be established. For established claims, the entry in the insolvency schedule in accordance with Sec. 178 III InsO shall have the effect of a final judgment vis-à-vis the insolvency administrator and the other creditors of the insolvency proceedings. Only after the verification meeting, according to Sec. 187 I InsO, the satisfaction of the creditors can be started. According to Sec. 187 II, III InsO, available cash can be distributed at any time, but only after prior consent of the creditors' committee - if such a committee has been appointed. The final distribution takes place in accordance with Sec. 196 I InsO after completion of the liquidation. Here, the creditors are considered according to their established claims. Subordinated creditors are only taken into account after complete satisfaction of the other creditors. Any remaining surplus is to be distributed to the shareholders pursuant to Sec. 199 S. 2 InsO.
(e) Costs of the insolvency proceedings
460Pursuant to Sec. 54 InsO, the costs of the insolvency proceedings consist of the court costs as well as the remuneration of the preliminary insolvency administrator, the insolvency administrator and the members of the creditors' committee.
(f) Insolvency plan
(aa) General
461Sec. 1 S. 2 Alt. 2 InsO offers the possibility of reorganizing the company concerned by means of an insolvency plan as an alternative to the regular liquidation. The aim here is the subsequent continuation of the company. In this respect, the InsO does not provide for an "automatic break-up", whereby the reorganization, unlike the joint satisfaction of the creditors according to Sec. 1 S. 1 HS 1 InsO, is not considered to be the primary objective of the proceedings.BVerfG, Decision as of 23.5.2006 - 1 BvR 2530/04 = BVerfGE 116, 1 - 23; BGH, Judgement as of 21.4.2005 - IX ZR 281/03 = BGHZ 163, 32 (35); Stürner/ Eidenmüller/Schoppmeyer/Ganter/Bruns, InsO, 4. Ed. (2019), Sec. 1 Sidenr. 20; Uhlenbruck/Pape, InsO, 15. Ed. (2019), Sec. 1 Sidenr. 1 It is therefore merely a procedure for achieving this very creditor satisfaction.Stürner/Eidenmüller/Schoppmeyer/Stürner, InsO, 4. Ed. (2019), Einleitung Sidenr. 2
462The insolvency plan is considered a flexible means of finding solutions tailored specifically to the company, based on the intention of the legislator to deregulate, respectively privatize the insolvency process.Brünkmans/Thole/Thole, Handbuch Insolvenzplan, 1. Ed. (2016), Sec. 1 Sidenr. 5 This is also reflected in the fact that the insolvency plan does not constitute a settlement, but is rather a private autonomous agreement, in conformity with the law, of the parties to the proceedings entitled to vote on the realization of the company's assets with full guarantee of the value of the participation rights.K. Schmidt/Spliedt, InsO, 19. Ed. (2016),vor Sec. 217 Sidenr. 5
463In addition to the reorganization of the company, liquidation forms and procedures deviating from the regular proceedings may also be considered as objectives of the plan proceedings.Braun/Frank, InsO, 9. Ed. (2022), Sec. 217 Sidenr. 1; Uhlenbruck/Lüer/Streit, InsO, 15. Ed. (2019), Sec. 217 Sidenr. 1
(bb) Submission authorization
464According to Sec. 218 I 1 InsO, only the insolvency administrator and the company itself are entitled to submit an insolvency plan in regular proceedings. Authorization to submit an insolvency plan by other parties, such as individual creditors, creditor groups or the creditors' meeting, is not possible, although the latter may commission the insolvency administrator in the ordinary proceedings to draw up such a plan or to submit a plan that has already been drawn up (cf. here the possibility of commissioning the administrator and the debtor to draw up an insolvency plan in the self-administration proceedings pursuant to Sec. 284 I InsO).Braun/Frank, InsO, 9. Ed. (2022), Sec. 218 Sidenr. 4; Kübler/Prütting/Bork/Spahlinger, InsO, 85. EL (2020), Sec. 218 Sidenr. 33 ff In the latter case, the insolvency administrator is obliged to submit the plan within a reasonable period of time in accordance with Sec. 218 II InsO, which depends on the specific situation of the proceedings and the company.Braun/Frank, InsO, 9. Ed. (2022), Sec. 218 Sidenr. 5
465However, the insolvency administrator shall also have a right of initiative to submit an insolvency plan competing with the one prepared on behalf of the creditors' assembly.Braun/Frank, InsO, 9. Ed. (2022), Sec. 218 Sidenr. 3
466Whereas the preliminary insolvency administrator is deemed to be able to start preparing a plan in accordance with Sec. 22 I 2 No. 3 Hs. 2 InsO (in relation to the company's ability to prepare an insolvency plan before the opening of proceedings in accordance with Sec. 218 I 2 InsO)Vgl. u.a. Graf-Schlicker/Kebekus/Wehler, InsO, 4. Ed. (2014), Sec. 218 Rn 3; Nerlich/Römermann/Braun, InsO, 43. EL (2021),Sec. 218 Sidenr. 31; Uhlenbruck/Lüer/Streit, InsO, 15. Ed. (2019), Sec. 218 Sidenr. 6 , it is questionable whether the preliminary insolvency administrator already has a right to submit a plan in accordance with Sec. 218 I InsO. This is to be rejected, since the initiation of insolvency plan proceedings presupposes that insolvency proceedings have already been opened and the right to submit a plan is therefore only available to the final insolvency administrator.Kübler/Prütting/Bork/Spahlinger, InsO, 85. EL (2020), Sec. 218 Rn 14; Stürner/Eidenmüller/Schoppmeyer/Eidenmüller, InsO, 4. Ed. (2019), Sec. 218 Rn 33; Smid/Rattunde/Martini, Der Insolvenzplan, 3. Ed. (2012), Sidenr. 2.48; K. Schmidt/Spliedt, InsO, 19. Ed. (2016), Sec. 218 Rn 8; Uhlenbruck/Lüer/Streit, InsO, 15. Ed. (2019), Sec. 218 Sidenr. 7
(cc) Components of the insolvency plan
467Pursuant to Sec. 219 InsO, the insolvency plan shall consist of the representative part, the formative part and the annexes pursuant to Sec. 229 seq. InsO. .
(aaa) Representative part
468Pursuant to Sec. 220 I InsO, the representative part describes the nature of the measures taken after the opening of proceedings, as well as those which are still to be taken. Furthermore, according to section 2, information is required on the basis and effects of the plan, which are relevant for the parties involved in the approval process with regard to their decision on whether to approve the plan and its confirmation by the court. In addition to the type of plan to date and the plan objective, this also includes company data, employee information, details of the pension protection association, key economic figures, the financial position of the company within the meaning of Sec. 151 InsO, a statement of assets and liabilities within the meaning of Sec. 153 InsO and the creditor structure. In the case of an intended reorganization which has not yet been completed by the time the insolvency plan is discussed and agreed, a description of the reorganization concept must also be prepared.Fridgen/Geiwitz/Göpfert/Geiwitz/von Danckelmann, BeckOK Insolvenzrecht, 26. Edition (2022), Sec. 220 Sidenr. 5a
469In addition to this, the effects of the plan on the prospect of satisfaction of the creditors (settlement calculation) must be explained. Pursuant to Sec. 220 II 3 and 4 InsO, continuation values are to be used for the valuation of the probable satisfaction without an insolvency plan (i.e. to assume the continuation of the company), unless the sale of the company or another continuation is deemed to have no prospect of success.
(bbb) Formative part
470The formative part under Sec. 221 InsO is considered the "executory part" because it contains all the provisions on how the legal position of the parties is to be changed by the plan. This includes, first and foremost, the waiver of the part of the creditors' claims exceeding that exceed the quota.Braun/Frank, InsO, 9. Ed. (2022), Sec. 221 Sidenr. 15
471A change in the legal position within the meaning of the standard shall be understood as any deviation from what would have applied under civil and procedural law in the regular proceedings without the insolvency plan.Kreft/Haas, InsO, 7. Ed. (2014), Sec. 221 Sidenr. 3; Schmidt/Thies, InsO, 7. Ed. (2018), Sec. 221 Sidenr. 7; K. Schmidt/Spliedt, InsO, 19. Ed. (2016),Sec. 221 Sidenr. 3
(ccc) Annexes
472Sec. 229 f. InsO regulates the documents to be attached to the insolvency plan under certain circumstances.
473In cases in which creditors are to be satisfied from current income of the company after termination of the insolvency proceedings, the insolvency plan must be accompanied by a statement of assets and liabilities pursuant to Sec. 229 InsO, in which the values of the assets and liabilities are to be compared with each other in the event of the insolvency plan taking effect. In addition to this, sentence 2 requires a presentation of the expected expenses and income, the sequence of income and expenses, as well as the insolvency for the period of the satisfaction of creditors. Pursuant to sentence 3, creditors who have not filed their claims but are known at the time the plan is drawn up must also be taken into account. The same applies to contingent liabilities, such as potentially possible warranty and liability cases.Fridgen/Geiwitz/Göpfert/Geiwitz/von Danckelmann, BeckOK Insolvenzrecht, 26. Edition (2022),Sec. 229 Sidenr. 6 f
474Sec. 230 InsO regulates the annex requirements for other specific cases. Pursuant to subsection (1) sentence 1, in cases where a natural person is the debtor and plans to continue the business, a declaration to that effect must be made by that person.
475The same applies pursuant to subsection 1 sentence 2 in cases in which the company is either a partnership without legal personality or a partnership limited by shares, whereby the declaration must be made in each case by the general partners provided for in the plan.
476However, if the insolvency plan is submitted by the company itself, this shall not apply pursuant to subsection 1 sentence 3. If the respective insolvency plan provides for creditors to take over shares in the company, the consent of each of these creditors is required in accordance with subsection (2) in order to protect them, within the meaning of Sec. 225a II 2 InsO, from receiving a shareholding against their will instead of monetary satisfaction.Vgl. Kübler/Zabel, Handbuch Restrukturierung in der Insolvenz, 2. Ed. (2015), Sec. 27 Sidenr. 193 If third parties assume obligations in the event of confirmation of the insolvency plan (e.g. waiver of the tax office with regard to taxation of the reorganization profit resulting from the plan), their declaration pursuant to paragraph 3 shall be attached to the insolvency plan.Zu diesem und weiteren Beispielen vgl. LG Düsseldorf, Decision as of 21.9.2015 − 25 T 404/15 = NZI 2015, 978; Smid, ZInsO 2016, 128; Uhlenbruck/Sinz, InsO, 15. Ed. (2019), Sec. 230 Sidenr. 6
477Paragraph 4 also requires the consent of the affiliated company that provided the collateral in the case of interventions in intra-group third-party collateral.
(dd) Structural measures under company law
(aaa) Procedural Participation of Shareholders
478For the purpose of increasing the legitimacy of majority decisions within the insolvency proceedings, Sec. 222 I InsO requires that, if the parties to the proceedings have different legal statuses, groups are formed in order to establish voting bodies which have an excessively high parallelism of interests.Stürner/Eidenmüller/Schoppmeyer/Eidenmüller, InsO, 4. Ed. (2019), Sec. 222 Sidenr. 2 ff Pursuant to subsection (1) No. 4, this shall also include the persons participating in the company if their share or membership rights are included in the insolvency plan. Such inclusion is to be assumed if share or membership rights are subject to rules which differ from those of the standard insolvency proceedings.ebenda Sidenr. 71.
(bbb) Exclusion of change of control clauses
479Sec. 225a IV InsO stipulates that both the conversion of claims into shareholdings in the company (para. 2) and measures within the meaning of para. 3 do not entitle the company to rescind or terminate existing contracts. The reason for the impossibility to include so-called "change of control" clauses is the aspect that the chances of reorganization are considerably reduced by the termination of contractual relationships (e.g. licenses).Braun/Frank, InsO, 9. Ed. (2022), Sec. 225a Sidenr. 24 f.; K. Schmidt/Spliedt, InsO, 19. Ed. (2016), Sec. 225a Sidenr. 55 f.; Längsfeld, NZI 2014, 734
(ccc) Withdrawal of a shareholder
480If one of the measures taken pursuant to subsections 2 or 3 constitutes an important reason for a participant in the company to leave the company, Sec. 225a V InsO regulates the compensation claim of this participant.
481Pursuant to sentence 1 HS 2, the amount of the claim is determined by the financial situation of the company. Any agreements made in the articles of association on a "withdrawal for cause" which deviate from subsection 5 are irrelevant with regard to the assessment of the severance payment pursuant to subsection 5, so that the share value in the case of normal liquidation is used as the benchmark here.Fridgen/Geiwitz/Göpfert/Geiwitz/von Danckelmann, BeckOK Insolvenzrecht, 26. Edition (2022), Sec. 225a Sidenr. 26
(ee) Voting procedure
(aaa) Examination by the court
482For the purpose of accelerating the proceedings and avoiding unnecessary creditor and court resources, the insolvency court shall conduct a preliminary examination pursuant to Sec. 231 InsO.Nerlich/Römermann/Ober, InsO, 43. EL (2021), Sec. 231 Sidenr. 1; Schmidt/Thies, InsO,7. Ed. (2018), Sec. 231 Sidenr. 1 Thus, the court shall reject the submitted plan pursuant to subsection 1 if provisions regarding the submission have been disregarded (in particular the formation of groups pursuant to Sec. 222 I InsO) and these deficiencies either cannot be remedied by the submitting party or cannot be remedied within the period set by the court (p. 1 no. 1).
483The same applies in cases where the probability of the plan being accepted by the parties involved (creditors; more on this below) or confirmed by the insolvency court is deemed to be obviously low (p. 1 no. 2). Obviousness is to be understood here as meaning that a rejection by the court pursuant to S. 1 No. 2 may only be made in clear cases (with probability bordering on certainty).BGH, Decision as of 20.7.2017 – IX ZB 13/16 = NZI 2017, 751; Stürner/Eidenmüller/Schoppmeyer/Breuer, InsO, 4. Ed. (2019), Sec. 231 Sidenr. 22; Wimmer/Jaffé, InsO, 9. Ed. (2018), Sec. 231 Sidenr. 29 f. This assessment shall primarily include the probability of confirmation of the plan within the meaning of Sec. 248 InsO (after acceptance by the creditors), any violations of procedural requirements within the meaning of Sec. 250 InsO, as well as any minority protection motions filed within the meaning of Sec. 251 InsO ().Anm. v. Madaus, NZI 2017, 752 (753)
484The same applies to the ground for rejection of obvious impracticability set out in sentence 1 no. 3. The standard to be applied by the court in this case shall not be based on the economic expediency or the anticipated success of the submitted plan, nor on the possibility of success of an intended reorganization. Rather, the focus is exclusively on the feasibility, so that a rejection by the court should only take place in exceptional cases.OLG Dresden, Decision as of 21.6.2000 - 7 W 951/00 = NZI 2000, 436; Schmidt/Thies, InsO, 7. Ed. (2018), Sec. 231 Sidenr. 20; Uhlenbruck/Lüer/Streit, InsO, 15. Ed. (2019), Sec. 231 Sidenr. 31
485A decision on a possible rejection pursuant to subsection (1) shall be taken within two weeks of the submission of the plan in accordance with the second sentence of subsection (1).
486In the special cases set out in subsection (2), namely the submission of a new insolvency plan after prior rejection of the old plan, lack of confirmation by the court or withdrawal of the new plan by the company, the court shall reject the newly submitted insolvency plan at the request of the insolvency administrator (with the consent of any creditors' committee appointed). A previous rejection within the meaning of Sec. 231 InsO shall not suffice as a possibility of rejection under paragraph 2.BGH, Decision as of 7.5.2015 – IX ZB 75/14 = NZI 2015, 697; Fridgen/Geiwitz/Göpfert/Geiwitz/von Danckelmann, BeckOK Insolvenzrecht, 26. Edition (2022), Sec. 231 Sidenr. 17
487Pursuant to paragraph 3, the submitting party shall have the right to file an immediate appeal against a decision within the meaning of Sec. 231 I and II InsO.
(bbb) Discussion and voting meeting
488If there is no rejection within the meaning of Sec. 231 InsO, the insolvency court shall set a date in accordance with Sec. 235 I 1 InsO for a discussion of the insolvency plan and the voting rights of the parties involved, and for a subsequent vote on the plan (discussion and voting date).
489Pursuant to subsection 1 sentence 2, the meeting must be scheduled within one month, although the deadline may be deviated from depending on the individual case.Fridgen/Geiwitz/Göpfert/Geiwitz/von Danckelmann, BeckOK Insolvenzrecht, 26. Edition (2022),Sec. 235 Sidenr. 3 f. Appeals against the scheduling determined by means of a resolution are not admissible.ebenda
(ccc) Prohibition of obstruction
490Contrary to the content of Sec. 244 I InsO, which requires a majority of the creditors in each group to approve the insolvency plan, Sec. 245 InsO presumes that the group has given its consent if certain conditions are met. The reason for this is the recognition that the refused consent of a group may constitute an abuse and the view of the legislator that a refusal in the case of a pareto-optimal insolvency plan for all creditors does not have a sufficient basis.Vgl. Nerlich/Römermann/Rühle, InsO, 43. EL (2021), Sec. 245 Sidenr. 1; Wimmer/Jaffé, InsO, 9. Ed. (2018), Sec. 245 Sidenr. 7
491The preconditions for this are that the groups of creditors concerned are deemed not to be placed in a worse position than in the normal proceedings (subsection 1 No. 1), that the group members who reject the plan are to receive an appropriate proportion of the value provided for in the plan for the satisfaction of the creditors (subsection 1 No. 2), and that the majority of the groups participating in the vote have approved the insolvency plan with the required majorities (subsection 1 No. 3).
492Pursuant to subsection (2), adequate participation within the meaning of subsection (1) No. 2 shall be deemed to exist if no creditor is satisfied for the full amount of its claims (subsection (2) sentence 1 No. 1), whereby any interest accrued after the commencement of proceedings shall not be taken into account in determining the 100 % quota.Fridgen/Geiwitz/Göpfert/Geiwitz/von Danckelmann, BeckOK Insolvenzrecht, 26. Edition (2022), Sec. 245 Sidenr. 10; a.A. Schmidt/Thies, InsO, 7. Ed. (2018), Sec. 245 Sidenr. 10 Furthermore, no economic advantage may be granted by the plan either to a creditor subordinated to the group refusing the plan (subsection 2 sentence 1 no. 2 alt. 1) or to the enterprise itself or a person with an interest in it (subsection 2 sentence 1 no. 2 alt. 2). An exception to paragraph 2 p. 1 no. 2 alt. 2 results from sentence 2 in conjunction with sentence 3, according to which managing shareholders may receive economic values without this being in the way of a prohibition of obstruction, provided that they declare their willingness to continue the company according to the plan on the one hand and on the other hand undertake to return what they have received should they leave the company prematurely as defined in sentence 2. In this respect, the absolute priority principle of Paragraph 2 Sentence 1 No. 2 is breached.Braun/Frank, InsO, 9. Ed. (2022), Sec. 245 Sidenr. 24
493A further requirement of the prohibition of obstruction is that no creditor ranking pari passu with the refusing group may be placed in a better position without a plan (para. 2 sentence 1 no. 3).
494In the event of the existence of intra-group third-party security pursuant to Sec. 222 I 2 No. 5 InsO, Para. 2a provides that for this group, if it refuses to consent to the plan, Paras. 1 and 2 shall apply only if the rights holders are adequately compensated for the loss of rights pursuant to Sec. 222 I 2 No. 5 InsO. Sec. 223a InsO is used here as a yardstick for the amount of the compensation.Fridgen/Geiwitz/Göpfert/Geiwitz/von Danckelmann, BeckOK Insolvenzrecht, 26. Edition (2022), Sec. 245 Sidenr. 14e
495For the purpose of protecting the shareholders (e.g. in connection with the debt-equity swap), paragraph 3 sets out the conditions for an appropriate participation of the shareholders.Fridgen/Geiwitz/Göpfert/Geiwitz/von Danckelmann, BeckOK Insolvenzrecht, 26. Edition (2022), Sec. 245 Sidenr. 15 f The participation shall be deemed to be reasonable provided that no creditor receives satisfaction in excess of the amount of its claim (subsection 3 no. 1) and no better position is taken by a shareholder ranking pari passu without a plan (subsection 3 no. 2).
(ddd) Protection of minorities
496Whereas Sec. 245 InsO presumes consent in favor of the majority principle if the above-mentioned conditions are met, Sec. 251 of the InsO supplements the standard for the purpose of individual protection of minorities within a group.Schmidt/Thies, InsO, 7. Ed. (2018), Sec. 251 Rn 1; Uhlenbruck/Lüer/Streit, InsO, 15. Ed. (2019), Sec. 251 Sidenr. 2
497At the request of a creditor or, in the case of debtor legal entities, at the request of a shareholder, confirmation of the insolvency plan within the meaning of section 248 InsO shall be refused pursuant to section 251 if the applicant submits a written objection or an objection in the minutes by the voting date at the latest (subsection 1(1)) and if the applicant is likely to be placed in a worse position compared with his position in the normal proceedings (subsection 1(2)).
498Pursuant to subsection 2, the admissibility of the petition requires the petitioner to establish credibly that he is in a worse position at the latest at the voting meeting within the meaning of Sec. 235 I 1 InsO. This is to be understood as a clear and easily ascertainable disproportion between the value of the settlement and the plan result.LG Wuppertal, Decision as of 18.05.2016 - 16 T 116/16 = ZInsO 2016, 1164; Uhlenbruck/Lüer/Streit, InsO, 15. Ed. (2019), Sec. 251 Sidenr. 19
499However, the court must reject the application under paragraph 1 if the formative part contains provisions according to which funds are made available in the event of proven worse position; the question of "whether" compensation is to be clarified outside the proceedings (paragraph 3). The background to this is the aspect that de facto there is no longer a worse position if the person who is worse off receives compensation, as well as the promotion of the reduction of blocking possibilities within the procedure.BT-Drs. 17/5712, 35, Zu Nummer 35 (Änderung von Sec. 251); Stürner/Eidenmüller/Schoppmeyer/Sinz, InsO, 4. Ed. (2019), Sec. 251 Sidenr. 36
(ff) Confirmation of the insolvency plan
500In order to protect the parties to the proceedings, Sec. 248 I InsO requires confirmation of an insolvency plan adopted by the parties to ensure that only one plan under Sec. 254 ff. InsO (), which has been properly drawn up and its content complies with the statutory requirements.Braun/Frank, InsO, 9. Ed. (2022), Sec. 248 Sidenr. 1
501Paragraph 2 requires the court to hear the insolvency administrator, any appointed creditors' committee and the company before making its decision. However, due to the fact that Sec. 248 II InsO is a "shall provision", a failure to hear the insolvency administrator cannot lead to the annulment of the decision.Braun/Frank, InsO, 9. Ed. (2022), Sec. 248 Sidenr. 7 f.; K. Schmidt/Spliedt, InsO, 19. Ed. (2016), Sec. 248 Sidenr. 3; Uhlenbruck/Lüer/Streit, InsO, 15. Ed. (2019), Sec. 248 Sidenr. 4
(gg) Legal effects of the insolvency plan
502With the final confirmation decision by the court pursuant to Sec. 248 InsO, the provisions set forth in the constructive part pursuant to Sec. 254 I InsO become effective for and against all parties involved and are final subject to Sec. 255 f. InsO. InsO, whereby the confirmation itself becomes final after a two-week appeal period within the meaning of Sec. 569 II ZPO in conjunction with Sec. 253, 6, 4 InsO, or immediately upon rejection of such appeal.Fridgen/Geiwitz/Göpfert/Freund/Stadler, BeckOK Insolvenzrecht, 26. Edition (2022),Sec. 254 Sidenr. 2
503According to Sec. 254 II InsO, third parties who are co-debtors, who guarantee the company vis-à-vis creditors, and those who have granted the insolvency creditor rights in rem in their own property not belonging to the insolvency estate are not parties to the insolvency plan, which results in the continued existence of the creditors' security interests, irrespective of the secured claims in the insolvency plan.Fridgen/Geiwitz/Göpfert/ Freund/Stadler, BeckOK Insolvenzrecht, 26. Edition (2022),Sec. 254 Sidenr. 5; Uhlenbruck/Lüer/Streit, InsO, 15. Ed. (2019), Sec. 254 Sidenr. 18 If provisions deviating from subsection (2) have been made with respect to insolvency creditors from intra-group third-party collateral within the meaning of Sec. 217 II InsO, these shall be exempt from the effects under subsection (2).Schmidt/Thies/Lieder, InsO, 9. Ed. (2022), Sec. 254 Sidenr. 9 However, in accordance with sentence 2, the company shall be released from its obligations towards the co-debtor, the guarantor or other persons entitled to recourse in the same way as it is released from its obligations towards the creditors, so that their rights of recourse are reduced analogously to the claims of the creditors in the insolvency plan.Fridgen/Geiwitz/Göpfert/Freund/Stadler, BeckOK Insolvenzrecht, 26. Edition (2022), Sec. 254 Sidenr. 6
504If a creditor is satisfied at a higher value than he would be entitled to under the plan (e.g. "nuisance settlement"), this shall not give rise to an obligation to return what has been obtained, provided that what has been obtained does not exceed the amount of the originally filed, undisputed claim.zum Beispiel der „Lästigkeitsabfindung“: Nerlich/Römermann/Braun, InsO, 43. EL (2021), Sec. 254 Sidenr. 8; Fridgen/Geiwitz/Göpfert/Freund/Stadler, BeckOK Insolvenzrecht, 26. Edition (2022),Sec. 254 Sidenr. 6
505Sec. 254 IV InsO also stipulates that, in the event of the execution of a debt-equity swap, no claims can be asserted against the existing creditors on the basis of any overvaluation of the receivables according to the plan (no differential liability).zum Begriff: Schmidt/Thies/Lieder, InsO, 9. Ed. (2022), Sec. 254 Sidenr. 15
506In addition to Sec. 254 InsO, Sec. 254a InsO contains further provisions regarding the effects of the confirmation of the plan pursuant to Sec. 248 I InsO. Pursuant to subsection 1, all declarations of intent included in the plan relating to rights to objects and transfers of shares in a limited liability company shall be deemed to have been made in the form prescribed by law upon confirmation of the plan. Pursuant to subsection 2, sentence 1, the same shall also apply to declarations of intent relating to the inclusion of shareholders' share and membership rights within the meaning of Sec. 225a InsO. Invitations, notices and other measures required under company law for the preparation of resolutions of the shareholders shall also be deemed to have been duly effected (paragrahph 2 sentence 2). According to Paragraph 3, the same applies to declarations of obligation subject to measures pursuant to Paragraph 1 or 2, which supersedes the formal requirements pursuant to Sec. 311b BGB, Sec. 15 IV GmbHG, among others.Braun/Frank, InsO, 9. Ed. (2022), Sec. 254a Sidenr. 5 f.
507The provisions of Sec. 254 f. InsO, according to Sec. 254b InsO, also insolvency creditors who have not filed their claims (Alt. 1), as well as those parties who have objected to the insolvency plan (Alt. 2). The inclusion of the affected parties under Alt. 1 serves primarily to protect against a possible circumvention of the effect of the plan through passive conduct in the plan preparation procedure, whereas the inclusion of the affected parties under Alt. 2 is a consequence of the principle of the voting majority.LAG Rheinland-Pfalz, Judgement as of 12.10.2006 - 4 Sa 281/06 = BeckRS 2007, 44876; Otte/Wiester, NZI 2005, 70, 71; Schmidt/Thies/Lieder, InsO, 9. Ed. (2022), Sec. 254b Sidenr. 1
(hh) Tax treatment of reorganization profits in insolvency plan proceedings
508According to Sec. 3a II EStG, a company-related reorganization exists "if the taxpayer proves the need for reorganization and the ability to reorganize the company, the suitability for reorganization of the business-related debt forgiveness and the intention of the creditors to reorganize at the time of the debt forgiveness". According to Sec. 3a I 1 EStG, restructuring profits (or income) are increases in business assets as well as business income from the cancellation of debts for the purpose of restructuring. According to Sec. 3a I 1 EStG, these are tax-free in total.Roth, Insolvenzsteuerrecht, 3. Ed. (2021), Sidenr. 4.22
509Beneficiaries within the meaning of Sec. 3a I 1 Alt. 2 EStG are only business-related debt cancellations, i.e. both privately-related debt cancellations and the cancellation of liabilities due to confusion are not covered by this.Roth, Insolvenzsteuerrecht, 3. Ed. (2021), Sidenr. 4.22 However, this does include income generated from a debt-equity swap and, under certain conditions, book profits generated by subordination.Brandis/Heuermann/Krumm, EStG, 160. EL (2021), Sec. 3a Sidenr. 20; Eilers/Schwahn, Sanierungssteuerrecht, 2. Ed. (2020), Sidenr. 2.42 f The same applies under Sec. 3a V EStG to increases in assets due to a discharge of residual debt.
510Sec. 3a EStG is also relevant for the tax treatment under trade tax pursuant to Sec. 7b GewStG. The same applies to corporate income tax under Sec. 7 I, 8 I-II KStG.Roth, Insolvenzsteuerrecht, 3. Ed. (2021), Ch. 4 Sidenr. 309
(g) Practical example of an asset deal: Transferring the reorganization of a specialty mechanical engineering company
511An international engineering company had accumulated substantial operating losses. As a result of the crisis, internal problems of the company became apparent, namely incomplete recording of customer orders, incorrect calculations, no or inadequate post-calculations, poor internal communication and a lack of leadership competence at management level. Initially, there was a management crisis, the consequences of which escalated into a liquidity crisis. Despite out-of-court restructuring measures, insolvency proceedings had to be filed.
512Due to the long lead times, the insolvency money effect alone could not ensure liquidity in the proceedings, so that a genuine mass loan became necessary. With the approval of the provisional creditors' committee, such a loan was taken out with a local bank. This made it possible to pay suppliers, some of whom were also prepared to deliver against a cost commitment, and to complete the orders.
513At the same time, a sales process was initiated. Initially, a regional competitor was interested in the company and wanted to acquire it within the framework of a transferring reorganization. However, due to family issues, the sale fell through shortly before completion. Negotiations continued with three interested parties. As a result, a transferring reorganization to a German investment company was realized. The real estate, the name (company), the entire fixtures and fittings, as well as the shareholding in the debtor's US subsidiary were acquired. As this was a transfer of business under Sec. 613a of the German Civil Code, the employees were transferred by operation of law.
(h) Practical example of an insolvency plan: Restructuring of a spa company
514A company in a spa town, which had about 50 properties with a size of about 77,000 m², generated its income from the operation of a senior citizens' residence and a medical fitness studio, from renting and leasing as well as from energy production.
515From the 1990s at the latest, structural problems arose, as changes in the health care system were followed by a drop in sales, mainly driven by the discontinuation of full funding for health cures. Financial difficulties were eliminated by the successive sale of properties. However, no strategic realignment took place. Therefore, the management board was finally forced to file for insolvency.
516Business operations were continued in full during the application process and after the opening of insolvency proceedings. At the same time, a restructuring concept was drawn up in consultation with the creditors' committee and with the involvement of the main contractual partners, which was implemented as part of an insolvency plan. Among other things, the business areas were restructured, unprofitable areas were closed, a new sales and marketing structure was established, and a personnel concept was drawn up and implemented.
517The insolvency plan included a capital reduction to zero and a simultaneous capital increase in order to attract new investors who would provide the company with the capital required for sustainable consolidation. As a result, the business operations of the company and the legal entity itself were preserved and restructured.
Author / Law firm
LIESER Rechtsanwälte Partnerschaft mbB
LIESER Rechtsanwälte Partnerschaft mbB
Josef-Görres-Platz 5
56068 Koblenz
Telefon: +49 261 30479-0
Telefax: +49 261 9114729
koblenz@lieser-rechtsanwaelte.de
About the author, Jens Lieser, attorney at law
Jens Lieser is a lawyer and specialist lawyer for insolvency law as well as a partner in the law firm Lieser Rechtsanwälte.
He studied in Freiburg and Mainz and is a member of the executive committee of the working group for insolvency law and restructuring in the German bar association.
About the author, Dr. Alexander Jüchser, attorney at law
Dr. jur. Alexander Jüchser is a lawyer and specialist lawyer for insolvency law as well as a partner in the law firm Wieser Rechtsanwälte.
Dr. Jüchser in antitrust law in Bonn. He studied in Frankfurt (Oder) and Salzburg and is an EBS business mediator.
About the author, Dr. Martin Kaltwasser, attorney at law
Dr. Martin Kaltwasser advises companies, investors and creditors on insolvency law and restructuring, also internationally.
In particular, also with corporate law liability issues. He also advises self-administration and distressed M&A and has his industry focus on bank insolvency.
Practice areas
Profile of the law firm
LIESER Rechtsanwälte looks for and finds individual case-related answers when it comes to the successful reorganization and restructuring of companies. We see ourselves as your partner and advise you on legal and business issues. With a high level of commitment and detailed specialist knowledge, we develop tailor-made solutions that create added value for all stakeholders.
Our goal: An optimal result for everyone involved and future prospects for the companies entrusted to us.
Strategic orientation
LIESER Rechtsanwälte has been active in the field of insolvency law and related areas of law such as labor, tax and commercial law for over 5 decades. Every order, every mandate is a top priority for us. Our 4 administrators and each of our around 50 employees take care of the respective procedure intensively. Every case is different and we find tailor-made solutions. For us, a high level of personal commitment, trustworthy support and teamwork are both an incentive and an obligation. All of our employees have distinctive entrepreneurial know-how, strong negotiating skills, reliability and quick and decisive action. We look ahead, think long-term and create individual solutions.
Offices & lawyers
Lieser works with a total of 4 administrators and 50 employees at the following 15 locations:
Altenkirchen
Kölner Straße 29
57610 Altenkirchen
Telefon: +49 2681 803618
Telefax: +49 2681 950505
altenkirchen@lieser-rechtsanwaelte.de
Bad Kreuznach
Schlossstraße 6
55543 Bad Kreuznach
Telefon: +49 671 2987280
Telefax: +49 671 2987543
badkreuznach@lieser-rechtsanwaelte.de
Bonn
Wachsbleiche 26
53111 Bonn
Telefon: +49 228 97664231
Telefax: +49 228 97664233
bonn@lieser-rechtsanwaelte.de
Darmstadt
Berliner Allee 65
64295 Darmstadt
Telefon: +49 6151 3975473
Telefax: +49 6151 3975111
darmstadt@lieser-rechtsanwaelte.de
Frankfurt am Main
Thurn-und-Taxis-Platz 6
60313 Frankfurt am Main
Telefon: +49 69 91501025
Telefax: +49 69 95928099
frankfurt@lieser-rechtsanwaelte.de
Koblenz
Josef-Görres-Platz 5
56068 Koblenz
Telefon: +49 261 30479-0
Telefax: +49 261 9114729
koblenz@lieser-rechtsanwaelte.de
Köln
Zollstockgürtel 63
50969 Köln
Telefon: +49 221 34806702
Telefax: +49 221 34806704
koeln@lieser-rechtsanwaelte.de
Limburg
Frankfurter Straße 9
65549 Limburg
Telefon: +49 6431 409837
Telefax: +49 6431 478077
limburg@lieser-rechtsanwaelte.de
Mainz
Kaiserstraße 39
55116 Mainz
Telefon: +49 6131 9729380
Telefax: +49 6131 9729382
mainz@lieser-rechtsanwaelte.de
Mannheim
Q 7, 24
68161 Mannheim
Telefon: +49 621 8455170
Telefax: +49 621 8455171
mannheim@lieser-rechtsanwaelte.de
Marburg
Bismarckstraße 14
35037 Marburg
Telefon: +49 6421 3505010
Telefax: +49 6421 3505011
marburg@lieser-rechtsanwaelte.de
Saarbrücken
St. Johanner Straße 41-43
66111 Saarbrücken
Telefon: +49 681 95802422
Telefax: +49 681 95802424
saarbruecken@lieser-rechtsanwaelte.de
Stuttgart
Stockholmer Platz 1
70173 Stuttgart
Telefon: +49 711 78119130
Telefax: +49 711 78119131
stuttgart@lieser-rechtsanwaelte.de
Trier
Zuckerbergstraße 1a
54290 Trier
Telefon: +49 651 1708424
Telefax: +49 651 1708425
trier@lieser-rechtsanwaelte.de
Wiesbaden
Klingholzstraße 7
65189 Wiesbaden
Telefon: +49 611 97774210
Telefax: +49 611 97774111
wiesbaden@lieser-rechtsanwaelte.de
Strategic Alliances
Arbeitsgemeinschaft Insolvenzrecht und Sanierung des DAV
