Temporary suspension of obligation to file for insolvency and of creditor’s right to request opening of insolvency proceedings

On 25 March 2020 the German parliament passed a bill “to mitigate the consequences of the COVID-19 pandemic in civil, bankruptcy and criminal procedure law” (COVID-19 Bill) that aims at protecting companies that experience financial difficulties as a result of the COVID-19 pandemic.

Vorübergehende Aussetzung der Insolvenzantragspflicht und des Rechts des Gläubigers, die Eröffnung eines Insolvenzverfahrens zu beantragen

Am 25. März 2020 hat der Deutsche Bundestag ein Gesetz „zur Abmilderung der Folgen der COVID-19-Pandemie im Zivil-, Insolvenz- und Strafverfahrensrecht (COVID-19 Insolvenzgesetz) beschlossen, das darauf abzielt, Unternehmen zu schützen, die infolge der COVID-19-Pandemie in finanzielle Schwierigkeiten geraten.

Our lives have changed completely in a few days due to COVID-19 and the world’s response to it. Governments react with a multitude of regulations, which have a considerable influence on the economy especially for the Retail & Consumer sector. This affects very different areas of law. Our sector approach consists, among other things, of showing you the legal consequences in the most diverse legal areas and our contact persons for this.

Debt exchanges have long been utilized by distressed companies to address liquidity concerns and to take advantage of beneficial market conditions. A company saddled with burdensome debt obligations, for example, may seek to exchange existing notes for new notes with the same outstanding principal but with borrower-favorable terms, like delayed payment or extended maturation dates (a "Face Value Exchange"). Or the company might seek to exchange existing notes for new notes with a lower face amount, motivated by discounted trading values for the existing notes (a "Fair Value Exchange").

One of the primary fights underlying assumption of an unexpired lease or executory contract has long been over whether any debtor breaches under the agreement are “curable.” Before the 2005 amendments to the Bankruptcy Code, courts were split over whether historic nonmonetary breaches (such as a failure to maintain cash reserves or prescribed hours of operation) undermined a debtor’s ability to assume the lease or contract.