Typical Course of the Crisis



Strategy Crisis
– Potential for success exhausted
– No new ones created

Product and sales crisis
– Sharp drop in demand

Success and earnings crisis
– Losses deplete equity
– Threat of over-indebtedness

Liquidity Crisis
– Insolvency looms

Insolvency maturity
– Insolvency looms
– Over-indebtedness


Obligation to file for insolvency

Over-indebtedness / Inability to pay


Over-indebtedness exists when the assets no longer cover the existing liabilities.

Starting Point:

– Balance sheet over-indebtedness
– Legal over-indebtedness
– Positive going concern forecast
– Negative going concern forecast

The management must file for insolvency within 6 weeks at the latest


Insolvency exists if the company is not in a position to meet its payment obligations as they fall due.

Starting Point:

All liabilities due as of 30.03.2021
BGH: If 90% of all liabilities can be paid within three weeks, there is no insolvency.
If not possible

The management must file for insolvency within 3 weeks at the latest

Crisis Early Warning System

Duty of the management of limited liability companies to identify crises at an early stage (StaRUG)

Structural Design

Risk identification (e.g. low equity capitalization or the house bank reduces the credit line)
Assessment of risks
Determination of the responsible persons
Outline of possible countermeasures (e.g. injection of equity)
Control and monitoring
Careful documentation of the fulfillment of obligations, if necessary in coordination with an external consultant

Core Problem of Insolvency Law

Timely determination of insolvency maturity
= Insolvency or over-indebtedness
and to act accordingly in the appropriate manner.
“A breeding ground for management liability risks”

Liability Risks for Managing Directors

General Criminal Offenses

  • Fraud, fraudulent inducement
  • Unfaithfulness § 266 StGB
  • Withholding of employee contributions to social security § 266 a StGB
  • Tax evasion

Insolvency offenses

  • Bankruptcy § 283 StGB
  • Breach of accounting obligations, § 283 b StGB
  • Preferential treatment of creditors
  • Delay in filing for insolvency § 15 a Abs. 4 u. 5 InsO
  • Delay in filing for insolvency § 32 III, § 42 I u. II StaRUG

Liability for Delay in Filing for Insolvency

Obligation to pay compensation for payments to company creditors after the company has become insolvent §15 b InsO (formerly §§ 64 GmbHG and others) Insolvency delay punishable!

Fault is a prerequisite
Scale of culpability = diligence of a prudent businessman

Relief from Liability

Payments in the ordinary course of business, in particular to maintain business operations, are compatible with the diligence of a prudent and conscientious businessman if

  • The obligation to file for insolvency pursuant to § 15a InsO was complied with
  • within the application period (3 or 6 weeks) measures are taken to eliminate the insolvency maturity or to prepare an insolvency application
  • Payments made with the consent of a provisional insolvency administrator


“Danger Recognized – Danger Averted?”

Often not enough! → Act in the crisis!

Take Out D&O Insurance

No longer trigger payments to shareholders (risk of avoidance in insolvency and own liability)

Reduce own Salaries

Documentation important!

Bringing Consultants, Lawyers and Tax Advisors on Board

Possibility of a debt settlement plan with all creditors (natural persons) Permanent review of liquidity and economic situation (BGH says: “The management already knows how the figures stand in the morning in the shower!”)

No Preferential Treatment of Creditors, No Plugging Holes!

Insolvency exists if the company is not in a position to meet its payment obligations as they fall due.

Recognize Insolvency and Act Accordingly!

File for insolvency in good time, if necessary advice on own liability consequences and if necessary own insolvency application.

Overview StaRUG

Act on the Stabilization and Restructuring Framework for Companies StaRUG

Duties of the Managing Director Core Element “Restructuring Plan“ Goals:
1. early crisis detection through a crisis early warning system Conduct of the proceedings by the debtor himself or by (even selective) use of the judicial instruments from the point of imminent insolvency Improving the chances of restructuring in the event of imminent insolvency
2. Duty of the managing director to take countermeasures in a crisis 1. Judicial plan coordination,
2. Plan confirmation (contestable)
3. Preliminary examination
4. Stabilization
5. (Termination of reciprocal contracts was unfortunately not implemented)
Overcoming so-called disruptive creditors (through cross-group majorities in the restructuring plan)
3. Obligation to report to the supervisory bodies In practice, mostly judicial restructuring proceedings similar to insolvency plan proceedings  

Every Journey Begins with a First Step

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