The obligation to file for insolvency now applies again without restriction, even to companies that have applied for state aid with a good chance of success. (Photo: © petrol/123RF.com)
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The previous obligation to file for insolvency has returned, and the coronavirus pause is over. What exactly does this mean for the affected companies? An expert answers the most important questions.
Since May 1, 2021, the old rules for insolvency filings have been reinstated , after the government granted companies a reprieve for the previous twelve months due to the coronavirus pandemic . The German trade journal "Deutsches Handwerksblatt" asked lawyer Kirsten Wilczek , a specialist in insolvency law, what companies in financial difficulties now need to be aware of.
DHB: What does it mean that the old rules regarding the obligation to file for insolvency now apply again?
Wilczek: During the pandemic, the legislature acted on a prudent basis. It initially suspended the obligation to file for insolvency if insolvency had been a consequence of the protective measures against the pandemic spread of SARS-CoV-2. These only conditional suspension The obligation to file for insolvency was often overlooked: Companies that have already as of December 31, 2019 were over-indebted or insolvent, were allowed not surf past the insolvency court on the Covid-19 wave.
Even managing directors of companies whose insolvency in 2020 was not due to the pandemic , or where there was no prospect of eliminating an existing insolvency, had to put on the black top hat and go to the district court.
DHB: What has changed in the meantime?
Wilczek: Always keeping in mind the infection situation and the consequences of lockdowns and shutdowns, the legislator gradually the obligation to file for insolvency revive As of 1 October 2020, the obligation to file for insolvency for insolvency again, only at indebtedness The suspension of the obligation to file for insolvency was extended until December 31, 2020.
Operations management
Operations management
Operations management
Most recently, a suspension of enforcement measures in cases of insolvency and over-indebtedness was in effect from January 1st to April 30th, 2021, triggered by pandemic control measures. This suspension only applied to companies that had applied for and were actually eligible for bridging aid , but were still waiting for the funds to be disbursed.
Since May 1, 2021, all exceptions have been lifted. The obligation to apply for government assistance now applies again without restriction , including to those companies that have applied for and are likely to receive government aid.
Important to know: The obligation to file for insolvency applies to companies with limited liability (GmbH, GmbH & Co. KG, Aktiengesellschaft), not to sole proprietors!
Managing directors of companies that have benefited from the suspension of the obligation to apply should immediately, if they have not already done so, drop everything to check whether they have been required to apply since May 1, 2021, or whether the statutory deadlines for submitting applications have only just begun.
As a reminder: In the event of insolvency , there is a three-week deadline for filing for insolvency; in the case of over - indebtedness , a six-week deadline applies (now newly regulated by law in Section 15a Paragraph 1 Sentence 2 of the German Insolvency Code) . These deadlines must not be fully exhausted if there is no longer any realistic prospect of recovery. If the horse is dead, one must dismount even before the aforementioned deadlines expire and go to the insolvency court on foot – preferably at a brisk pace.
DHB: What risks do managing directors face if they miss the application deadline?
Wilczek: Anyone who violates this duty as a managing director or board member faces the threat of criminal prosecution as well as a civil law – and to be taken quite literally – Piercing the corporate veil into your own wallet.
Delaying insolvency proceedings is not a trivial offense. Section 15a, paragraph 4 of the German Insolvency Code (InsO) stipulates a penalty of "up to three years imprisonment or a fine." A fine exceeding 90 daily rates results in a criminal record. The consequences of a conviction are far-reaching: According to Section 6 of the German Limited Liability Companies Act (GmbHG), a conviction for an insolvency offense can preclude future employment as a managing director of a limited liability company (GmbH). Business owners risk having their business license revoked (Section 35 of the German Trade Regulation Act (GewO)).
The civil law consequences are also far-reaching: Managing directors are liable for payments made in violation of insolvency regulations if they delay filing for insolvency (§ 15b InsO). But that's not all. It is not uncommon for managing directors to follow the GmbH they manage into insolvency. Regardless of any personal guarantees for company liabilities (such as sureties or mortgages) that they have privately assumed, they can face substantial claims for damages . They are liable for payments made from company funds after the company became insolvent, even if these payments were "only" used to satisfy outstanding creditor claims.
The Insolvency Code has now incorporated these liability provisions (among others, from the Limited Liability Companies Act, formerly Section 64 GmbHG) to provide guidance to managing directors required to file for insolvency regarding what they are still permitted to pay and what they must refrain from paying after the company becomes insolvent. This regulation is now found in Section 15b of the Insolvency Code.
DHB: What are the managing directors allowed to pay in the event of insolvency?
Wilczek: In short: In principle, in the event of insolvency no payment But every rule has exceptions. Here are payments permitted, credentials for
Incidentally, with this regulation, the legislator has reined in the Federal Court of Justice , which had imposed such strict requirements on the exceptionally permissible payments that every managing director could only be advised, after the onset of insolvency, to stop payments and file for insolvency as quickly as possible in order to maintain business operations in the insolvency proceedings with the help of a provisional administrator.
DHB: But there are more cases in which the managing director is liable for delaying insolvency?
Wilczek: Yes, there is also the External liability towards creditorsIf the managing director misses the right time to file the application, he or she also risks external liability to the company's creditors, who can hold the managing director personally liable regardless of the insolvency proceedings. For example, if the management to insolvency has already occurred Contracts If the company's payment obligations arise, and if these payment obligations can no longer be fulfilled due to insolvency, the business partner will suffer financial losses. The managing director is liable for these losses. personally with your own Wealth.
But that's still not all: The managing director is also liable to so-called pre- insolvency creditors , who already had claims against the company before it became insolvent. This applies if these creditors suffer damages due to the delayed filing of the application, as new debts of the company accrue before the insolvency proceedings are finally initiated, thus reducing the pre-insolvency creditors' share of the distributable insolvency estate (so-called quota loss ).
For the sake of completeness, it should be mentioned that the managing director faces further liability claims vis-à-vis the tax office and social security institutions , which very often also come into play in cases of delayed insolvency proceedings. One such claim is liability for unpaid taxes : Section 69 of the German Fiscal Code (Abgabenordnung) establishes direct personal liability for the managing director to the tax office for unpaid corporate taxes, in particular wage tax debts.
Furthermore, there is liability for the employee's share of social security contributions : Section 823 Paragraph 2 in conjunction with Section 266a of the German Criminal Code (StGB) gives rise to a claim for damages by the social security institutions against the managing director for withheld employee shares of social security contributions.
DHB: What privileges apply in corona-related crises?
Wilczek: Can the managing director completely provethat the company he represents falls under the statutory Exceptions to the obligation to file for insolvency, criminal and civil liability – as I have explained above – not if he acts now in time.
There are further privileges for creditors who have entered into deferral agreements or granted loans to companies affected by the coronavirus pandemic. In these cases, the insolvency avoidance claims under Section 129 et seq. of the German Insolvency Code (InsO), which the insolvency administrator may wish to assert in subsequent insolvency proceedings, are restricted.
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