Insolvency is unwanted, and every business doesn’t wish to go to that stage. However, it is a sad and actual truth that happens. In layperson terms, when a company or corporation doesn’t have enough liquid funds to pay off its debtors, they are said to be insolvent, and the appropriate party can start an insolvency procedure to get their money back. Like all other legal procedures, insolvency matters need specific and experienced legal help, and it is best to hire a proficient insolvency lawyer from our Briest law firm.
In legal language, a company becomes insolvent if it can pay only less than 90% of its liabilities for at least three weeks and stops the payments afterward. Usually, when the present management realises that they won’t be able to meet their financial responsibilities at present or no longer within the next 12 months, the threat of insolvency becomes obvious. Therefore, it is best to call the best-grade insolvency lawyer from the Briest law firm.
Practised in diverse cases
At the Briest law firm, we work by helping our customers through this difficult time. In Germany, the legal parameters of the Avoidance of Transactions Act and the Insolvency Regulation (Insolvenzverordnung, InsO) are the primary sources of such proceedings, and our team represents and advises the clients in all insolvency matters. We are proficient in conducting legal insolvency proceedings and asserting liquidation claims, as our insolvency lawyers routinely take those on in the field.
Our expert teams are field-trained, have years of experience, and offer straightforward advice to our clients in their time of need.
Information about the insolvency laws
The ongoing insolvency law in Germany (GIA) has changed, and the amendment introduces new parameters. Previously, the law was determined by the German Insolvency Act of 1999 and was amended in 2012. The Act on the Stabilization and Restructuring Framework for Companies (StaRUG) was established on 01.01.2021, which allows for out-of-court restructuring using majority voting measures and cross-class cramdown, which was unheard of before in German insolvency law history. According to the European Commission, Germany’s insolvency regime ranks second among the member EU states in terms of efficacy, and our insolvency lawyer teams acquire the gains comprehensively and without error.
The GIA was always targeted to offer possibilities for self-administration, in-court restructuring, general liquidation, and post-sale creditor satisfaction. However, the fundamental norm behind it wasn’t making the survival of an insolvent company possible. Rather, it was to reach the collective satisfaction of the creditors on the most striking terms, either by selling its assets or keeping the business running. However, experts felt the old GIA was running behind the overseas insolvency laws regarding out-of-court and in-court restructurings.
What does the new insolvency law feature?
As a result, the legal environment witnessed the ESUG amendment of the GIA on 01.03.2012. Here are some of the featured aspects of the law after the new amendment:
- The self-administration tools have improved.
- Its influence on the appointment of insolvency administrators for debtors and creditors has become better.
- An all-around protection (presented as a special self-administration feature) for in-court restructuring has been established.
- The powers of insolvency administrators to put transactions to one side (also called clawback provisions) were cut off.
A review of the modern regulations the German federal structures implemented in October 2018 concluded that the reform was successful. At Briest Law Firm, our insolvency lawyers routinely conduct in-court restructuring processes simply and without problems.
Against whom can the insolvency claims be filed?
The German legal regulations have specified that the person or entity who can legally bring about an insolvency claim against someone. The law is complex and can give rise to unique cases in special circumstances, so hiring expert insolvency lawyers from the Briest law firm is better. We believe in keeping our customers updated with the proceedings and offering directed advice for their unique cases. Some of the aspects of filing insolvency claims against an entity are given below:
- According to German insolvency law, any legal and natural person can open an insolvency claim, even if they do not partake in self-employed professional or commercial activity. Any person refraining from engaging in these activities is called a consumer.
- Insolvency proceedings are also applicable for filing against partnership-without-legal-personality assets. It can be a limited partnership (Kommanditgesellschaft), a general commercial company (Offene Handelsgesellschaft), or for particular funds (for example, a deceased person’s property).
- However, the law prohibits the opening of insolvency proceedings against assets owned by the Federal Government or Land [vide InsO Section 12(1) (1)].
Our dependable insolvency lawyer team extensively knows the laws’ intricacies and is prepared to counter any legal query the opposition presents. Our insolvency lawyers keep constant updates about ongoing and past cases, and we offer directed advice and effective services according to our client’s needs.
In conclusion
As a business owner, it is sad to see your establishment being pieced, divided, and sold to offset the creditor’s debts. Without proper and informed insolvency lawyers, you may not get the advantages and debtor-friendly parameters or annexures the law provides. Therefore, contacting us at the Briest law firm for experienced legal help will be worthwhile.
