Restructuring and insolvency—Germany—Q&A guide

The following Restructuring & Insolvency practice note provides comprehensive and up to date legal information covering:

  • Restructuring and insolvency—Germany—Q&A guide
  • 1. What main legislation is applicable to insolvencies and reorganisations?
  • 2. What entities are excluded from customary insolvency or reorganisation proceedings and what legislation applies to them? What assets are excluded or exempt from claims of creditors?
  • 3. What procedures are followed in the insolvency of a government-owned enterprise? What remedies do creditors of insolvent public enterprises have?
  • 4. Has your country enacted legislation to deal with the financial difficulties of institutions that are considered ‘too big to fail’?
  • 5. What courts are involved? What are the rights of appeal from court orders? Does an appellant have an automatic right of appeal or must it obtain permission? Is there a requirement to post security to proceed with an appeal?
  • 6. What are the requirements for a debtor commencing a voluntary liquidation case and what are the effects?
  • 7. What are the requirements for a debtor commencing a voluntary reorganisation and what are the effects?
  • 8. How are creditors classified for purposes of a reorganisation plan and how is the plan approved? Can a reorganisation plan release non-debtor parties from liability and, if so, in what circumstances?
  • 9. What are the requirements for creditors placing a debtor into involuntary liquidation and what are the effects? Once the proceeding is opened, are there material differences to proceedings opened voluntarily?
  • More...

Restructuring and insolvency—Germany—Q&A guide

This Practice Note contains a jurisdiction-specific Q&A guide to restructuring and insolvency in Germany published as part of the Lexology Getting the Deal Through series by Law Business Research (published: June 2021).

Authors: Freshfields Bruckhaus Deringer—Franz Aleth; Nils Derksen

1. What main legislation is applicable to insolvencies and reorganisations?

In principle, the Insolvency Act governs all bankruptcies and judicial reorganisations in Germany. As regards the restructuring and orderly winding up of financial institutions, the prerequisites and proceedings are primarily stipulated in the Law on Bank Restructuring and the German Act on the Recovery and Resolution of Credit Institutions. There are also a number of special provisions in the German Banking Act granting certain rights and responsibilities to the German Federal Financial Supervisory Agency (FSA) in the event of (threatened) insolvency of a financial institution. For example, the FSA can impose a temporary moratorium. In order to alleviate the impacts of the covid-19 pandemic, the German legislator introduced a law to mitigate the consequences of the pandemic in civil, insolvency and criminal proceedings that, inter alia, included a temporary suspension of the obligation to file for insolvency owing to illiquidity or over-indebtedness until 30 September 2020. In September 2020, the German legislator extended the suspension for over-indebtedness (but no longer illiquidity) until 31 December 2020.

2. What entities are excluded from customary insolvency or reorganisation proceedings

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