CLIENT ALERT
February 9, 2020
Read time: 3 min
For companies which get into financial difficulties as a result of the corona epidemic, the obli-gation to file for insolvency shall be temporarily suspended until 30 September 2020. This was announced by the Federal Ministry of Justice in a press release on 16.03.2020 (see here).
According to information from the ministry, the draft bill is currently prepared and a first reading in the Bundestag is scheduled for 25.03.2020. It is expected that the law will enter into force this month.
According to the aforementioned press release, the temporary suspension of the ob-ligation to file for insolvency will be subject to the following conditions:
1. The occurrence of illiquidity or over indebtedness results from the effects of the COVID-19 epidemic.
2. There must be reasonable prospects of concern based on the application for public assistance or serious financing or restructuring negotiations.
The suspension of the obligation to file for insolvency will therefore be limited to companies that face financial difficulties due to the COVID-19 epidemic. The precise details of the other requirements have not yet been determined. However, a key prerequisite could be that the relevant company has already applied for concrete assistance from the federal government’s financial assistance package. This is indicated in the press release where it states that the suspension of the obligation to file for insolvency is intended to flank the aid measures adopted by the Federal Govern-ment to support liquidity. It should be avoided that affected companies have to file for insolvency solely because the processing of applications for public assistance or financing or restructuring negotiations could not be completed in time.
It is presumed that the exact text of the law will made public in the reading in the Bundestag, which is planned for March 25, 2020.
In addition to a suspension of the obligation to file for insolvency pursuant to section 15a InsO, the accompanying regulations on payment prohibitions of the man-agement of a GmbH, AG or GmbH & Co. KG according to § 64 section 1 sentence 1 GmbHG; § 92 section 2.
