Germany

The Corona Crisis leads worldwide to critical situations for companies.
In light of this, Digitorney has asked lawyers from various countries specialized in restructuring law for recommendations on what needs to be done and which solutions are at hand to weather the Corona Crisis.
This part of our series focuses on Germany:

1) When does a company need to file for insolvency in Germany?

German insolvency law basically provides for two scenarios with the obligation to file and one carries the option to file for insolvency. As announced by the BMJ (Federal Ministry of Justice and Consumer Protection) in a press release on March 16, 2020, a legal regulation to suspend the obligation to file for insolvency is to be created in the short term. This is intended only to protect companies that get into financial difficulties as a result of the corona pandemic. MORE

2) What liability risks exist for the management in Germany in a corporate crisis?

The managing director of a GmbH or the board of directors of a stock corporation are generally liable with their entire private assets when filing for insolvency too late. It is imperative to analyze such risks for each individual case even in case the above-mentioned special measures of the BMJ really enter into force. MORE

3) Is there any state aid available for companies in Germany due to the Corona crisis?

On March 13, 2020, the BMF (Federal Ministry of Finance) adopted a package of measures to cushion the effects of the corona virus. The aim is to protect jobs, support companies and provide companies and businesses with sufficient liquidity to cope with the corona crisis. MORE

4) What immediate measures should a German company take if it is affected by the Corona crisis?

Potential threats and their consequences are different for each company. Whether it is disruptions in the supply chain, in production due to increased cases of infection among employees, or problems with customers, all disruptions carry the risk of failing to achieve the planned economic goals for the current fiscal year. MORE

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