The Federal Ministry of Justice and Consumer Protection (BMJV) now implements, with great commitment and unprecedented speed, what it has generally announced on 16 March 2020: 

The Federal Ministry of Justice and Consumer Protection (BMJV) now implements, with great commitment and unprecedented speed, what it has generally announced on 16 March 2020 (see also The four pillar protective governmental shield for Germany):

The German government announced that it will expand the KfW financing programme.

German legislator finally introduces tax exemption for income resulting from debt waivers in restructuring scenarios with retroactive effect.

The reform of claw-back rights in German insolvency proceedings which provides for more legal certainty for creditors has become effective on 5 April 2017.

To date, a debt waiver has been frequently used as a tool to successfully restructure German-based companies in financial difficulties.

In light of the UK’s cram down and director-friendly processes, in particular its scheme of arrangement model, major European economies such as France, Germany and Italy have worked hard to develop regimes that give greater emphasis to pre-insolvency alternatives. These new regimes create cram down mechanisms and encourage debtor-in-possession (DIP) financings, ultimately aiming to make restructuring plans more accessible, more efficient, and crucially more reliable; essentially more in tune with the Anglo-American approach to insolvency and restructuring.

German Federal Court of Justice decision paves the way for bond restructurings under 2009 Bonds Act.

Frank Grell is a partner at Latham & Watkins who chairs the firm’s German Restructuring and Insolvency Practice. In this interview, he reflects on several successful applications of the German Insolvency Act (Insolvenzordnung) since the law was passed in 2012 and the continued shift towards a restructuring-based approach to large corporate insolvencies.

Frank Grell is a partner at Latham & Watkins who chairs the firm’s German Restructuring and Insolvency Practice. Grell reflects on some of the major changes brought about by Germany’s 2012 Insolvency Act (Insolvenzordnung), including an increase in the rights of creditors in the proceedings over the assets of German companies, the introduction of “protective shield” proceedings and a reduction in the negative stigma previously associated with restructuring and insolvency.