In a corporate crisis, timing determines how many options remain: those who act early can restructure, negotiate and shape the outcome — those who wait until the duty to file for insolvency applies will be administered.
In a corporate crisis, timing determines how many options remain: those who act early can restructure, negotiate and shape the outcome — those who wait until the duty to file for insolvency applies will be administered.
Clience.Legal guides companies and managing directors through precisely this phase: objective in the analysis, humane in dealing with people, and with the clear goal of protecting both the company and its management.
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The biggest concerns of business owners in a crisis are rarely legal in nature: it is about their livelihood, their employees, their reputation and their family. That is exactly why good crisis advice does not begin with a form, but with a sober assessment of the situation and the question of which options for action are still available.
Typical warning signs are visible long before illiquidity occurs: declining liquidity, postponed payments to suppliers, maxed-out credit lines, a growing number of payment reminders, and falling sales in core segments. Those who take these signals seriously and create transparency about their own situation regain control.
Under § 1 StaRUG, managing directors are in any case required to continuously monitor developments that could jeopardize the continued existence of the company and to take appropriate countermeasures when risks are identified. Early crisis detection is therefore not optional but a mandatory duty of management.
The duty to file is linked to illiquidity (§ 17 InsO) and over-indebtedness (§ 19 InsO); § 15a InsO governs who must file for insolvency and when. Illiquidity exists when payment obligations that are due can no longer be met; over-indebtedness exists when the assets no longer cover the liabilities and continuation of the business is not predominantly likely.
Whether one of these situations has arisen cannot be judged by gut feeling. What is required is reliable liquidity planning and — in the case of over-indebtedness — a going-concern forecast. Both are also management’s most important exculpatory evidence when the question later arises of who knew what and when.
Several paths are open before insolvency. The StaRUG provides a preventive restructuring framework that allows a restructuring plan to be implemented even without the consent of all creditors. The ESUG strengthened debtor-in-possession and protective shield proceedings, which allow management to stay at the helm — under supervision, but not stripped of power.
Which path is appropriate depends on the company’s capacity for restructuring, the creditor structure, financing and the time frame. This selection is at the core of our crisis advice: we examine what is actually achievable and then implement it consistently — rather than discussing options that have long since lapsed.
Insolvency proceedings serve not only to liquidate assets but can also serve restructuring. Proceedings are regularly used to clean up contracts, streamline structures and continue operations. For managing directors, this means that a timely, well-prepared filing is often the more responsible decision than delaying it.
We support this step so that management remains able to act: with prepared documents, clear communication with employees, creditors and customers, and a realistic picture of what actually happens in the first weeks of the preliminary insolvency proceedings.
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You want to know whether you are obliged to file and how to protect yourself personally.
Payment terms are getting longer, reserves are shrinking — there is still room to shape the outcome.
The business model works, but the structure or the financing no longer does.
You need representation and a clear roadmap for the coming weeks.
You want to know which contributions make sense and what risks they entail.
Assessing, documenting and classifying illiquidity and over-indebtedness in a structured way.
Setting up a monitoring system that makes threats to the company’s continued existence visible.
Legally safeguarding operational and financial restructuring measures.
Payment prohibitions, documentation and securing evidence in the critical phase.
Negotiating deferrals, settlements and restructuring contributions in a structured manner.
Support in the filing and preliminary proceedings, including debtor-in-possession proceedings.
Brief introductory conversation, digital and non-binding.
Secure and digital, with no paperwork at all.
Analysis of your situation with clear recommendations.
Efficient, location-independent and personal.
In the event of illiquidity or over-indebtedness, the petition must be filed without undue delay, and no later than three weeks after the ground for insolvency has been established. Missing this deadline exposes you to personal liability and to criminal liability for delayed filing for insolvency.
Illiquidity exists when a company can no longer meet its payment obligations as they fall due. The Federal Court of Justice (BGH) looks at whether a shortfall of 10% or more can be closed within the three-week forecast period; following its decision of June 28, 2022, the assessment can also be based on a liquidity status on three reference dates within three weeks.
StaRUG comes into play before ESUG and applies in the event of impending illiquidity in order to avoid insolvency. It allows individual creditors to be selectively included, whereas under ESUG a proposal must be made to all creditors. If the company is already insolvent, restructuring under ESUG may be an option.
Once the company is insolvent, payments from the company’s assets must generally be avoided. Exceptions include payments in the ordinary course of business to keep operations running, payments within the filing period under § 15a InsO, and payments approved by the insolvency administrator. Where the line is drawn should be examined and documented in each individual case.
The crisis package with ongoing advice, review of the duty to file for insolvency, restructuring support and liability protection starts at €2,500 net per month for companies with up to 10 employees, €3,800 from 10 and €5,200 from 50 employees. The insolvency package is priced on the same scale.
No. Insolvency does not have to mean the end. The proceedings also serve to restructure the company; what matters is a sound plan and the timing of your action.
Attorney, Certified Specialist in Commercial and Corporate Law
Darius Dubiel is a Certified Specialist in Commercial and Corporate Law with a particular focus on compliance advisory, restructuring, insolvency law, digitalization and the use of artificial intelligence (AI) in a corporate context. He specializes in corporate law, legal support for coaches and questions of insolvency and restructuring law. Another focus is representing coaches and educational providers in proceedings concerning the Distance Learning Protection Act (FernUSG), ZFU approval and refund claims by customers.
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