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International Corporate Rescue

Journal Issues

  • Vol 1 (2004)
  • Vol 2 (2005)
  • Vol 3 (2006)
  • Vol 4 (2007)
  • Vol 5 (2008)
  • Vol 6 (2009)
  • Vol 7 (2010)
  • Vol 8 (2011)
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  • Vol 12 (2015)
  • Vol 13 (2016)
  • Vol 14 (2017)
  • Vol 15 (2018)
  • Vol 16 (2019)
  • Vol 17 (2020)
  • Vol 18 (2021)
  • Vol 19 (2022)
  •         Issue 1
  •         Issue 2
  •         Issue 3
  •         Issue 4
  •         Issue 5
  •         Issue 6
  • Vol 20 (2023)
  • Vol 21 (2024)
  • Vol 22 (2025)

Vol 19 (2022) - Issue 3

Article preview

Start-ups in a Crisis: What to Watch out For? Evaluation of Recent German Court Decisions

Joachim Ponseck, Partner, and Professor Dr Artur M. Swierczok, Counsel, Baker McKenzie, Frankfurt am Main, Germany

Synopsis
With recent statistics suggesting that between 80% and 90% of start-ups fail within the first five years, creating a new business is inherently a risky venture. However, while the risk of the founders should ideally be limited to the invested equity and the work expended, strict legal obligations in Germany constitute an additional hurdle making managing directors personally liable for failing to file for insolvency within the appropriate timeframe. Since over-indebtedness is an important mandatory reason for insolvency, companies in financial difficulties must generally forecast whether they will be 'financed through' for the next 12 months, although such predictions are naturally more difficult for newly formed businesses. Therefore, there have been some calls for the concept of over-indebtedness to be interpreted more mildly for start-ups. The following article gives an overview about recent court decisions of the Higher Regional Court of Düsseldorf and the Federal Court of Justice (BGH), which have directly and indirectly dealt with this matter.

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International Corporate Rescue

"ICR keeps you up-to-date with the most important need-to-know information to support your daily work. Recommended for everyone who wants to stay informed about the most important topics reflected in the title: International Corporate Rescue."

Prof. Em. Bob Wessels, University of Leiden

 

 

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