The Federal Ministry of Justice and Consumer Protection is currently preparing legislation to suspend the obligation to file for insolvency, in order to protect companies that have run into financial difficulties as a result of the coronavirus epidemic.
The aim is to prevent affected companies from having to file for insolvency merely because applications for public aid or financing and restructuring negotiations cannot be concluded within the three-week filing period given the exceptional current circumstances.
For this reason, legislation is to suspend the obligation to file for insolvency for a period until 30 September 2020.
The prerequisite, however, is that the grounds for insolvency are based on the effects of the coronavirus epidemic and that, due to an application for public aid or serious financing or restructuring negotiations, there are reasonable prospects of restructuring for the party otherwise required to file.
In addition, an authorisation is to be proposed for the BMJV to issue a regulation extending the measure until no later than 31 March 2021.
https://www.bmjv.de/SharedDocs/Pressemitteilungen/DE/2020/031620_Insolvenzantragspflicht.html
Frequently asked questions
Frequently asked questions
Is the obligation to file for insolvency suspended due to the coronavirus crisis?
Yes, the Federal Ministry of Justice and Consumer Protection is preparing legislation to suspend the obligation to file for insolvency until 30 September 2020. The aim is to protect companies that have run into financial difficulties as a result of the coronavirus pandemic.
What requirements apply to the suspension of the obligation to file for insolvency?
The grounds for insolvency must result from the effects of the COVID-19 pandemic. In addition, there must be well-founded prospects of restructuring, based either on an application for public aid or on serious financing or restructuring negotiations.
Why is the obligation to file for insolvency being suspended?
In the current situation, applications for public aid or financing and restructuring negotiations often cannot be completed within the statutory three-week deadline. The suspension prevents companies from having to file for insolvency solely for this reason.
Can the suspension of the obligation to file for insolvency be extended beyond 30 September 2020?
Yes, a regulatory authorization for the BMJV is planned, allowing the measure to be extended until 31 March 2021 at the latest.