Insolvency & Restructuring
Insolvencies are a complex chapter in economic life. In the corona crisis you are faced with new challenges. Even today, no one knows exactly how long the crisis will last and what effects it will have on your company in the coming months.
For that reason, the maximum period for filing a corona-conditioned insolvency petition has been extended from 60 days to 120 days as of the occurrence of the insolvency conditions.
Usually, you are obliged to file for insolvency not only when you become insolvent, but also if you are over-indebted (e.g. as a limited liability company), this is suspended in case of over-indebtedness occurring between 01. March 2020 and 31. March 2021. However, if over-indebtedness (still) exists on 31. March 2021, an application for insolvency proceedings must be filed immediately. If there is no obligation to apply for insolvency, the liability of the organs for violation of Section 69 (2) IO as a protective law is also excluded. During this period, insolvency proceedings may not be opened based on a creditor application if you remain solvent, although over indebted.
Due to payment by installment model from the Finance Office and the social security institutions for phase 1 (until 31.06.2022) and phase 2 (until 31.03.2024), tax and order arrears can be paid over a period of up to 36 months. These partial payment options lead to a deceptive security, ultimately the arrears must be paid in full and submitted without discount.
On July 17,2021 “the Restructuring and Insolvency Directive Implementation Act” (Restrukturierungs- und Insolvenz-Richtlinie-Umsetzungsgesetz (RIRUG)) entered into force (BGBl Ⅰ 147/2021).
The Federal Act on the “Restructuring of Companies” (ReO) provides companies in financial difficulties with the preventive option of averting an impending insolvency with a short-term restructuring court procedure which includes a temporary enforcement freeze. Furthermore, the continuation of the existing company should be ensured through a restructuring plan. Voting on the restructuring plan shall take place in creditor classes with a head majority and a majority of 75% of the claims, in a court restructuring plan meeting. The restructuring plan meeting has to be ordered by the court within 30 to 60 days after submission of the plan. Even if not all creditor classes agree to the restructuring plan, the plan can be enforced due to a court validated, class-covering Carm- Down. The implementation of the restructuring plan is performed in self-administration. A restructuring office is to be ordered intending to support the debtor and the creditor.
Due to the modification of the insolvency code, it is possible for consumers as well as entrepreneurs to free themselves of debts within a deadline of three years.
If insolvency cannot be avoided despite government support “hardship fund” (Härtefallfonds), “relief fund” (Hilffonds), “short-time work” (Kurzarbeit), deferment etc.), we can set the course for an optimal outcome for you by prudently preparing and conducting insolvency proceedings.
If you are a creditor or contractual partner affected by an existing or already filed insolvency of your debtor or contractual partner, we represent your interests and support you in enforcing your rights.