In bankruptcy as in federal jurisprudence generally, to characterize something with the near-epithet of “federal common law” virtually dooms it to rejection.

On 1 January 2021, the German Act on Stabilization and Restructuring Framework for Business (StaRUG) came in to force as part of the German Act on Further Development of Restructuring and Insolvency Law (SanInsFoG). It contains several new pre-insolvency restructuring procedures, including a new preventive restructuring plan and corresponding protection of minority creditors.

What is the aim of the new preventive restructuring plan?

In January 2020 we reported that, after the reconsideration suggested by two Supreme Court justices and revisions to account for the Supreme Court’s Merit Management decision,[1] the Court of Appeals for the Second Circuit stood by its origina

The Further Development Act on Restructuring and Insolvency Law (Sanierungsrechtsfortentwicklungsgesetz, or SanInsFoG2) came into force at the beginning of 2021, marking the final implementation of Germany's latest insolvency law innovations.

Here, we outline how the original, more extensive plans and draft laws from autumn 2020 compare with what was ultimately implemented.

Which provisions weren't implemented?

The SanInsFoG introduces the possibility of early risk identification and preventive restructuring before the stage of insolvency maturity.

It seems to be a common misunderstanding, even among lawyers who are not bankruptcy lawyers, that litigation in federal bankruptcy court consists largely or even exclusively of disputes about the avoidance of transactions as preferential or fraudulent, the allowance of claims and the confirmation of plans of reorganization. However, with a jurisdictional reach that encompasses “all civil proceedings . . .

In Germany, the duty to file for insolvency if there is illiquidity (Zahlungsunfähigkeit) and/or over-indebtedness (Überschuldung) was suspended under certain circumstances due to the COVID-19 pandemic until the end of September 2020.

The German Federal Government has passed a limited extension of the suspension period regarding over-indebtedness. We summarise the new legislation and outline the key takeaway for your business below.

What does the new legislation say?

I don’t know if Congress foresaw, when it enacted new Subchapter V of Chapter 11 of the Code[1] in the Small Business Reorganization Act of 2019 (“SBRA”), that debtors in pending cases would seek to convert or redesignate their cases as Subchapter V cases when SBRA became effective on February 19, 2020, but it was foreseeable.

Our February 26 post [1] reported on the first case dealing with the question whether a debtor in a pending Chapter 11 case may redesignate it as a case under Subchapter V, [2] the new subchapter of Chapter 11 adopted by the Small Business Reorganization Act of 2019 (“SBRA”), which became effective on February 19.

Our February 26 post entitled “SBRA Springs to Life”^[1] reported on the first case known to me that dealt with the issue whether a debtor in a pending Chapter 11 case should be permitted to amend its petition to designate it as a case under Subchapter V,^[2] the new subchapter of Chapter 11 adopted by

State governments can be creditors of individuals, businesses and institutions that are debtors in bankruptcy in a variety of ways, most notably as tax and fine collectors but also as lenders. They can also be debtors of debtors, in their role, for example, as the purchasers of vast quantities of goods and services on credit. And they can also be transferees of a debtor’s property in (at least) every role in which they can be creditors.