What does this mean for managing directors and your company?
On June 28, 2022, the Federal Court of Justice (BGH) issued a judgment on determining the illiquidity of companies that could also have implications for insolvency advice. The judgment makes it possible to determine the point in time of illiquidity using an additional method. It clarified the previous case law, according to which a company is illiquid if it cannot cover the liabilities due on the reference date with the liquid funds available on that date and also cannot close a shortfall of 10.0% or more with the liquid funds flowing in during the three-week forecast period.
The judgment expands the existing jurisprudence in the sense that, in addition to the current method, a liquidity status can also be created at three respective dates within a three-week period, in which only the liquid assets available at the respective date are compared to the due liabilities. If a liquidity gap of 10.0% or more arises on these three dates, the company is already considered insolvent retroactively starting from the first date.
For insolvency and crisis management advice, this means that companies should further improve their liquidity planning and control in order to detect potential insolvency at an early stage. In particular, it is important that the historical data that serve as the basis for presenting the current financial position are accurately taken from the financial statements. The determination of future-oriented data must be derived from the historical data in a factual and computational manner and further developed taking into account sound planning assumptions.
As an attorney advising on insolvency law and crisis matters, Mr. Dubiel is at your side to help you improve your company’s liquidity planning and control and to act quickly and professionally in the event of a crisis. We are happy to answer your questions and help you with your individual situation.
