Focus of Activity
COMPANIES AND ENTREPRENEURSCorporate Crisis
Managing Director Liability
Insolvency Proceedings
Focus
Corporate Crisis
In a corporate crisis, there are considerable liability and criminal law risks for the management. In addition, restructuring opportunities for the company are often missed due to too hesitant or not well thought-out actions. Therefore, my urgent recommendation: At precisely the point in time when liquidity difficulties first become apparent, the management should seek advice on insolvency law.
After I have been mandated in a corporate crisis, the first step is to check together with my clients whether there is an obligation to file for insolvency pursuant to § 15a of the Insolvency Code (InsO), i.e. whether insolvency (§ 17 InsO) and/or over-indebtedness (§ 19 InsO) have already occurred. I then review and discuss with my clients the further steps and measures to overcome the corporate crisis and minimise the liability risks for the management.
Ideally, possible reasons for insolvency should be eliminated and an insolvency application avoided. However, if filing for insolvency cannot be avoided due to the legal or economic circumstances, it is important to prepare the insolvency proceedings in the best possible way in order to enable the company to be restructured within the framework of the insolvency proceedings. Possible instruments of the InsO for this purpose are self-administration and the so-called protective shield proceedings (sections 270 – 285 InsO), the insolvency plan (sections 217 – 269 InsO) and the transferring restructuring.
I will gladly explain to you in detail the advantages and disadvantages of these restructuring instruments and discuss with you which approach makes sense in a specific individual case.
«No dispute would
last long
if the right
or wrong
were not on both
sides.»
François VI. Herzog de La Rochefoucauld
Focus
Managing Director Liability
The continuation of a company in crisis is associated with considerable liability risks for the management. For this reason, it is not uncommon for the management to be sued for damages by both the insolvency administrator and business partners after the opening of insolvency proceedings. Even if these claims should be justified on the merits, they are usually “maximum claims” that can and must be corrected considerably. The thorough processing of the facts and precise legal examination of the claims asserted against the management is therefore urgently required.
Ideally, my mandate is given early on in the corporate crisis so that I can prevent liability risks from arising. Due to many years of specialization in insolvency law, I am able to assist my clients to defend against claims asserted against them, even after insolvency has been opened. In particular, I check with my clients whether an out-of-court solution or a judicial clarification is the more sensible alternative and, if necessary, I take over the legal representation of my clients in court proceedings.
Focus
Insolvency Proceedings
There is hardly any insolvency proceeding in which the insolvency administrator does not assert payment claims against contractual partners and/or shareholders of the insolvent company on the basis of an insolvency avoidance pursuant to Sections 129 – 147 of the German Insolvency Code (InsO) and demand the reversal of payments received from them. For those affected, however, the contestation of insolvency by the insolvency administrator usually comes completely unexpectedly, especially since they have already suffered considerable financial damage as a result of the insolvency of their business partner.
Those affected can only be advised to respond to the first letter of the insolvency administrator contesting the claim. This should be submitted to a lawyer specializing in insolvency law for review. Even if the claim should turn out to be justified after careful examination, a comparative agreement with the insolvency administrator is quite possible at an early stage of the assertion of the claim and is usually the most economically sensible alternative. In the long term, the Company’s business processes should be adapted to minimize potential risks of rescission.
For these tasks I am your ideal contact person. In addition to my many years of practical experience in the field of insolvency avoidance, I have been lecturing for several years in the subject of “Insolvency Avoidance” at the Nürtingen / Geislingen University of Applied Sciences in the master’s program in Corporate Restructuring and Insolvency Management.
