Since 27.03.2020, companies that are in financial difficulties due to the COVID-19 pandemic have been exempt from the obligation to file for insolvency. This exemption applies for a limited period for all insolvency grounds until 30.09.2020 (see also our newsletter on the law to mitigate the consequences of COVID-19). On September 2, 2020, the German government agreed to extend the suspension of insolvency until December 31, 2020, so that the extension can be expected to be adopted in September 2020.
It should be noted that the extension of the insolvency stay from October 1, 2020 only applies to over-indebted but still solvent companies. This means that the scope of application of the insolvency stay is likely to be extremely limited. Over-indebted companies are otherwise only subject to an obligation to file for insolvency if there is no positive going concern forecast. Medium-term solvency is a key indicator of a positive going concern forecast.
As a result, from October 1, 2020, debtors will once again be obliged to file for insolvency in the event of insolvency and managing directors will be liable for payments made after the occurrence of insolvency. The consequence for creditors is that payments they receive from customers and business partners in crisis from October 1, 2020 onwards may later be reclaimed by the insolvency administrator as part of an insolvency challenge. The protection provided by the Act to Mitigate the Consequences of the Corona Pandemic ends on this date.
The author and your usual contacts will be happy to answer any questions you may have!
Dr. Jan Hermeling
hermeling@tigges.legal
+49 211 8687 138
