When executing public M&A transactions, dealmakers need to understand local market practice as well as the local regulatory environment.

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.

Europe has struggled mightily during the last several years to triage a long series of critical blows to the economies of the 28 countries that comprise the European Union, as well as the collective viability of eurozone economies. Here we provide a snapshot of some recent developments regarding insolvency, restructuring, and related issues in the EU. 

Chapter 11 focuses on preserving reorganization or going concern value over liquidation value. As a corollary, Chapter 11 assumes that the most efficacious way to achieve that result is to retain management and enable multiple outcomes either through a plan of reorganization, a series of going concern sales and even a liquidating plan. Chapter 11 enables a wide range of proposals to be put into a reorganization plan, including having the company and its management survive the process.

Stand 16. April 2020

Walder Wyss

Prof. Dr. iur. Urs Schenker unter Mitwirkung von Caroline Grand

2020

Seefeldstrasse 123 8034 Zrich

Tel. +41 58 658 55 31 [email protected]

INHALT

1. Sistierung der Pflicht zur Konkursanmeldung bei berschuldeten Gesellschaften .............................................................................................................................. 3

This quick guide summarises the duties that a managing director of a German GmbH (hereinafter "director") is subject to, and how those duties change when the company is insolvent or at risk of being insolvent.

It also gives an overview of the personal risk to directors when the company is in financial difficulty.

As part of the package of measures to mitigate the effects of the corona crisis, the German Bundestag has fast-tracked an act to mitigate the consequences of the COVID-19 pandemic in civil law, insolvency law, and the law on criminal procedure, adopting it into law on 25 March 2020. 

The act contains a civil law moratorium that benefits parties who owe certain forms of contractual performance where the COVID-19 pandemic has forced them into the position that they cannot meet their contractual obligations.

On 27 March 2020, the law for the Mitigation of the Consequences of the COVID-19 Pandemic in Civil, Insolvency and Criminal Proceedings Law was announced in the Federal Law Gazette (BGBl. I 2020, page 569). Among other things, the retroaction under commercial law in case of restructuring measures for the year 2020 was extended from eight to twelve months, although adaptations in the Reorganisation Tax Act (UmwStG) were not made in this context. This may result in complications.

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.

What specific provisions does the new law contain for tenancies?