Vol 18 (2021) - Issue 5

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Germany: Insolvency Filing Obligation in Full Force Again – A Look on Upcoming Further Changes

Synopsis
Since 1 May 2021, the obligation to file for insolvency (which is subject to civil and criminal liability) for companies and their directors in Germany does apply without restrictions again. For more than a year, the German legislator had suspended all or part of the insolvency filing obligation for companies that had run into financial difficulties as a result of the COVID-19 pandemic. Since January 2021, the insolvency filing obligation had only been suspended under narrow conditions for companies that could hope to receive state aid and had not yet received them. However, until the very end, there was a considerable misconception among many companies and their directors about the specific scope of the suspension. Many directors (still) assumed a comprehensive suspension or misjudged its narrow
conditions. This legal uncertainty has now probably come to an end. If the legislator does not suspend the obligation to file for insolvency again with retroactive effect, the obligation will again apply completely from 1 May 2021, even for those companies that were and are particularly affected by the COVID-19 pandemic.
However, it is not only in this respect that normality is gradually returning in Germany – virtually in parallel with the development of the vaccination campaigns.
Over the next few months, important changes are due to be made, among other things to state aid measures.
We also briefly highlight these changes in this article, as they are likely to be of considerable importance for the medium- and long-term planning of many companies.