I INSOLVENCY LAW, POLICY AND PROCEDURE

i Statutory framework and substantive law

Germany’s insolvency law can be considered as both old and new.

Insolvency legislation in Germany dates back to 1878, when the Bankruptcy Act established fundamental insolvency principles for the German empire, which was founded just eight years before.

However, it also considered modernised because today’s insolvency law is mainly determined by the German Insolvency Act (GIA), which came into force in 1999 and was substantially amended in 2012.2

Although the GIA always aimed to provide possibilities for in-court restructuring including self-administration, besides general liquidation and post-sale creditor satisfaction, the prevailing principle was the liquidation of the insolvent company and sale of the assets. Thus, German insolvency practitioners felt that German insolvency law is not competitive to foreign insolvency laws that provide for better in-court and out-of-court restructurings.

Consequently, on 1 March 2012 the GIA was amended (ESUG-amendment). Since this amendment, the self-administration tools and influence on the appointment of the insolvency administrator for debtors and creditors have improved, and an umbrella protection proceeding as a special feature of self-administration aimed at an in-court restructuring has been established. However, calls for the introduction of an out-of-court restructuring regime were not heard, but the discussion is continuing, fuelled by the EU Commission initiative for harmonisation of European insolvency law. The general perception of insolvency practitioners in Germany is that German insolvency law is now more competitive to other European and non-European insolvency legislation and the tools for restructuring insolvent companies through an in-court proceeding have been successfully amended.3

Still, the general principle of German insolvency law is not the survival of the insolvent company at any cost, but to reach collective satisfaction of the debtor’s creditors on the most attractive terms – either by keeping the company running or by selling its assets (See Section 1 of the GIA).

General insolvency proceedings (liquidation)

The proceedings described in the following paragraphs cover the general insolvency proceedings. Special proceedings aimed at restructuring the debtor are discussed in Section I.iii, infra.

Preliminary insolvency proceedings

After a filing for insolvency by the debtor or a creditor, the insolvency court starts to examine whether the company is actually insolvent and if there are sufficient assets to meet the expenses of the proceeding in a preliminary insolvency proceeding. The insolvency court appoints a preliminary insolvency administrator (PIA). The debtor and a preliminary creditors’ committee (if established by the court because of the fulfilment of certain thresholds) can suggest or – fulfilling certain requirements – even make a binding proposal for an individual person to be appointed. The PIA controls and limits the power of the management of the insolvent company or takes control of all actions of the debtor.

This ‘preliminary phase’ is unknown to many foreign creditors and debtors and is regularly the source of legal questions. such as ‘who is representing the company now?’ and ‘can we continue trading with the company?’ Essentially, and on a very general note, the insolvent company continues its business with its current management but is controlled and limited by the PIA. The debtor can continue its business as long as transactions are confirmed or carried out by the PIA.

Preliminary proceedings do not usually exceed three months because for such period the German state pays the employee’s wages (up to a certain amount) and the debtor is released from paying such wages.

General insolvency proceedings

If the court is positive that the debtor is insolvent and enough assets are available regular insolvency proceedings start and the PIA is replaced by the (final) insolvency administrator (IA). The IA is usually the same person as the PIA.

As of the opening of the general insolvency proceedings, the IA takes full control of all assets of the debtor. The management is still in place, but it loses control of the debtor.

During the proceeding, all rights of taking decisions are with the IA who needs the consent of the creditors’ committee or the creditors’ assembly for material actions.

Creditors of the company who earned their claims before the opening of insolvency proceedings, file their claims against the insolvent estate with the IA and inform the IA about securities granted to them.

There are three classes of creditors: first, there are secured creditors (creditors entitled to separate satisfaction) such as those secured by mortgages or security assignments.4 They can demand priority of receipt of the money up to full satisfaction of their claim (minus a fee for the IA, which amounts to 9 per cent in many cases) when the asset is sold. If their claim is not fully satisfied, the remaining part will be treated as an unsecured claim.

Secondly, there are unsecured creditors,5 which are typically suppliers or customers who dealt with the debtor prior to the opening of insolvency proceedings. They only receive the general insolvency quota at the final distribution of the insolvent estate. The average quota in corporate insolvencies is approximately 4–7 per cent of the claim.

Finally, there are subordinated creditors,6 for example, creditors with subordination agreements by statute, such as lenders of shareholder loans or by individual contract. These creditors usually do not receive any payment on their claims.

Creditors, who have a right of segregation because they are the owner of the asset that only happens to be in the possession of the debtor, are not creditors of the insolvent estate. As a general rule, they can claim return of their assets from the IA. Typically, this can apply to suppliers with extended retention of title clauses – a concept often unknown to foreign suppliers outside of Germany.

A German characteristic of insolvency law is that claims against the insolvent estate that were established during the preliminary stage by consent of the PIA or during the general insolvency proceedings by the IA7 are preferential to all unsecured insolvency claims and have to be settled in full and first, together with the insolvency court fees and fees for the IA and creditors’ assembly.

With the exception of that peculiarity, there are no other preferential unsecured creditors, such as tax authorities.

After the IA realises the assets of the company, collects outstanding claims, gives back assets that do not belong to the insolvent estate, settles preferential claims and sets aside unlawful transactions, the unsecured creditors receive the general insolvency quota and the insolvency proceedings end.

The insolvency proceedings are always supervised and led by the insolvency court, and the IA constantly reports to the insolvency court as well as to the creditors’ assembly.

Right to set aside transactions (clawback)

Another special feature of German insolvency law is the broad power of the IA to set aside transactions of the insolvent estate carried out before filing for insolvency proceedings or during preliminary insolvency proceedings.8 This powerful tool of the IA is at the heart of an ongoing debate between German insolvency practitioners, and a bill was presented by the German government in September 2015 to limit the IA’s power in this regard.9 See Section V, infra, for more details.

While the general purpose of these clawback rules is not challenged, particularly setting aside transactions that are detrimental to creditors that aimed to harm the insolvent estate and favour certain creditors, the extent to which the courts and IA have applied these rules has been criticised. Generally, transactions carried out within three months prior to the filing or after filing contain a substantial risk of being set aside by the IA. However, under certain circumstances the IA can set aside transactions that were carried out for a period of up to 10 years before filing for insolvency proceedings. If a clawback is successful, the other party has to return to the insolvent estate what was received in full (e.g., a purchase price) including any resulting interest since the opening of the insolvency proceedings, while such party only receives an unsecured counterclaim against the insolvent estate (e.g., value of the delivered goods), which will be satisfied with the general insolvency quota only.

ii Policy

Whenever insolvency proceedings over a business start, it is the IA’s prevailing goal and obligation to seek out the best satisfaction possible for all creditors and present it to the creditors’ assembly. It is this assembly that decides whether to liquidate, sell or restructure the debtor’s business.

Liquidation, including a sale of the business assets to a buyer who continues part or all of the business, is still the most likely outcome of such decision (approximately 90 per cent of all corporate insolvency proceedings).

In-court restructuring of the business through insolvency plans (up to 5 per cent) and self-management including umbrella protection proceedings (up to 5 per cent, though only 2 per cent in 2015) have become more popular and effective since 2012, and are regularly applied in big insolvency cases. Some features of these restructuring tools are outlined in Section I.iii, infra.

iii Insolvency procedures

There are two main types of insolvency procedure: the general procedure, ending with liquidation and winding up of the company; and an in-court restructuring through self-administration and an insolvency plan.

Liquidation

See Section I.i, supra. A general corporate insolvency proceeding over a German company typically lasts for a time period of three to four years.

Self-administration and insolvency plan

Although these features have been in place since 1999, they are rarely used in practice, with rates of approximately 1 per cent of all corporate insolvencies until 2012.10

In self-administration, the company’s management continues to manage the company when:

  • a the company applies for self-administration in its petition for insolvency proceedings; and
  • b there are no circumstances that lead to the conclusion that self-administration will be detrimental to creditors.

If a preliminary creditors’ committee supports the petition for self-administration by unanimous vote, the insolvency court must grant self-administration proceedings.

Instead of a PIA or IA, the insolvency court appoints an insolvency custodian. This person supervises the debtor and has, to some extent, limited rights similar to an IA (in particular to set aside transactions prior to filing for insolvency) but does not have a direct influence on the management or power of disposal over the assets.

A special type of self-administration is the umbrella protection proceeding that was introduced in 2012 (also called protective shield proceedings and, according to the law, ‘the preparation of a restructuring’). The company can apply for the umbrella protection when it is not likely that the company can be restructured.

Under the umbrella, the company is granted a grace period of up to three months by the insolvency court to present an insolvency plan to creditors. The insolvency court appoints an insolvency custodian as in general self-administration; however, the company is entitled to select the individual person if such person is qualified. During the grace period, creditors of the company cannot pursue their rights by legal enforcement.

When the insolvency plan is presented to creditors, a normal self-administration insolvency proceeding starts and this full insolvency proceeding can be finalised within a few weeks when everything is prepared well. The insolvent company can return from insolvency proceedings without a substantial flaw of having been insolvent as the time period can be very short, no IA was involved, management of the company continued business and the creditors consented to a restructuring result instead of an IA distributing the assets. Therefore, the umbrella protection proceeding has been highly marketed since 2012 and has become popular in prominent insolvency cases (such as Entertainment Distribution Company, involving a producer of CDs and DVDs) as a proceeding that that is not regarded as a ‘real’ insolvency by the public. From a legal viewpoint, however, it is an in-court insolvency proceeding.

Self-administration does not necessarily lead to a certain outcome of insolvency proceedings. Still, the assets of the company can be sold or the self-administration ends at some stage and is transformed into general insolvency proceedings (this happens with approximately one-third of proceedings that start in self-adminstration).11 Usually, however, self-administration is combined with an insolvency plan and for the umbrella protection an insolvency plan is mandatory.

An insolvency plan is an instrument that can be used in any of the described insolvency proceedings, thus in a general proceeding, in general self-administration and following the umbrella protection time period. As a general principle, the creditors decide, divided into certain group of creditors, on the distribution of the insolvent estate that may differ from statutory law in a general proceeding.12 The plan, drawn up by the IA or the insolvency custodian or the management of the company in cooperation with the insolvency custodian, displays the financial situation of the company and points out measures that should be taken and their expected effects. In particular, the plan can provide for a corporate restructuring of the debtor and conversion of debt into equity. The creditors who are affected by the plan are divided into voting groups. A negative vote from one group is irrelevant if there is proof that the insolvency plan is not worse for such group than a distribution under statutory law. After the court has confirmed the plan, too, the debtor supervised by the IA or insolvency custodian has to carry out the prescribed measures.

While self-administration and insolvency plans tend to lead to better satisfaction of creditors than ordinary insolvency proceedings, and tend to be faster and more acceptable to debtors and creditors, in practice they can only be applied to substantial insolvency cases. The reason for that is that they require:

  • a very professional advisers, which incurs substantial costs for the debtor;
  • b professional management who are experienced in insolvency; and
  • c substantial assets and a clear going-concern perspective that favours restructuring over liquidation.

Self-administration proceedings (in particular umbrella-protection proceedings combined with an insolvency plan) can be completed very swiftly compared to general proceedings. There have been cases where the proceedings ended four to six months after filing for umbrella protection.

Ancillary insolvency proceedings

If the centre of main interest (COMI) of a debtor is outside Germany but the debtor operates a branch office in Germany, rules on international insolvency apply. As far as the COMI of the debtor is in the EU, Regulation 1346/2000/EC applies.13 Under this regulation a secondary insolvency proceeding can be pursued in Germany if the debtor has a branch office in Germany regarding the assets in Germany. European secondary insolvency proceedings are not seen very often in Germany. The most popular example was BenQ in 2007.

If the COMI of the debtor is not within the EU, the GIA provides in Section 354 et seq. for the possibility of creditors to file for a secondary insolvency proceeding regarding the German assets. Again, such procedure is not very common.

The possibility of ancillary insolvency proceedings in Germany has not prevented trends for forum shopping, particularly within the EU. This is especially related to forum shopping to the UK in order to use a scheme of arrangement as an out-of-court restructuring instrument allowing for a cramdown of dissenting creditors – a concept that does not exist in Germany. However, since 2012 German insolvency experts have been of the opinion that the insolvency instruments introduced by the insolvency law (ESUG) reform have made forum shopping less attractive, taking into account the tremendous costs sometimes involved.

iv Starting proceedings

Essentially, the management of a company is obliged to file for insolvency in case of illiquidity or over-indebtedness. The criterium of over-indebtedness is not met on a pure balance sheet perspective but primarily depends on the question of whether the company is likely to be prosperous in the future. Thus, companies regularly instruct accounting firms and lawyers to examine if the company is over-indebted.

Illiquidity occurs if the company is – at a certain point in time – unable to pay more than 90 per cent of its debt when due and this situation will not improve over a period of three weeks following such date. If illiquidity or (insolvency) over-indebtedness occurs, the management is obliged to immediately (or at least within three weeks) file for insolvency. If the management does not adhere to such obligation, this is a criminal act and can lead to imprisonment for up to three years.

A company can opt to file for insolvency if the illiquidity is ‘threatening’ (impending illiquidity); in other words if it is likely that the company will be illiquid once the debts become due.

A creditor must have a legal interest in the opening of insolvency proceedings to be entitled to file for insolvency of a debtor. That is the case if the creditor can prove its claim, and it is likely that the debtor is insolvent because, for example, legal enforcement measures against the debtor have failed. The debtor will be heard by the court before preliminary proceedings are commenced.

The competent insolvency court is the local court where the company has its COMI, which is usually the place of its registered business seat.

v Control of insolvency proceedings

The power to make decisions during insolvency proceeding lies mainly with the creditors and the IA.

However, insolvency proceedings are started, supervised and ended by the insolvency court, which takes a more active role than in Anglo-Saxon countries.

Besides the basic obligation of the debtor’s management to file for insolvency when necessary, the management may also be personally liable for other violations of civil and criminal law before and during insolvency proceedings. Managing directors are more likely to be liable towards the insolvent company if they made payments out of the company even though the company was insolvent at that time from a legal perspective. After insolvency proceedings are opened, the management has to cooperate with the IA and provide necessary information to the IA. In self-administration the management stays in power but must coordinate certain actions with the insolvency custodian.

vi Special regimes

All entities are subject to the GIA. However, some peculiarities apply to financial institutions. Under the German Bank Reorganisation Act – a reaction to the financial crisis of 2008 – only the Federal Finance Supervisory Authority (BaFin) is entitled to file for insolvency proceedings over banks. Usually, before insolvency proceedings are started, BaFin tends to support a restructuring of the bank through a moratorium. BaFin also has the power to take measures for stabilisation of these banks if it is needed to stabilise the financial market. With regard to ‘important’ banks from a European point of view, EU Regulations 806/2014 and 1024/2013 and EU Directive 2014/59/EU apply too (Single Resolution Mechanism). In Germany, the Restructuring and Liquidation Act 2014, in particular, incorporates the European rules into national law. Under these laws, national and European institutions have specific rights to restructure or liquidate important banks outside of general insolvency law. This includes the power to sell assets of the bank or to order a compulsory bail-in of bank creditors.

Also, for insurance companies, the right to file for insolvency is limited. Again, only the supervising authority (usually BaFin) is entitled to file for insolvency. Although the proceedings are governed by the GIA, some special features of the insurance law apply,14 such as automatic termination of insurance agreeements one month after the opening of insolvency proceedings.

With regard to group companies the GIA does not currently provide for special group insolvency rules. However, there are both European and German bills in the legislative process at the moment.

vii Cross-border issues

See Section I.iii, supra.

German insolvency courts acknowledge foreign insolvency proceedings under EU Regulation No. 1346/2000 or under Section 343 of the GIA as being valid in Germany as well. However, the German Federal Court does not acknowledge an English scheme of arrangement as being an insolvency proceeding, while for instance the US Chapter 11 or the Italian amministrazione stradordinaria proceedings are recognised as being insolvency proceedings.

II INSOLVENCY METRICS

Corporate insolvencies are at a long-time low in Germany.15 This is because of a strong and stable domestic economy (1.7 GDP growth in 2015) and cheap terms of financing. The unemployment rate is the lowest it has been for 25 years.16

23,230 companies filed for insolvency in 2015, which is the lowest rate of insolvencies in 20 years.17 In the first half of 2016, 10,750 corporations became insolvent, a decrease of 6.8 per cent compared to the same period last year. It is remarkable that most of the insolvent corporations are very small companies. Almost 50 per cent of insolvent companies with an annual turnover of less than €250,000. 81 per cent of insolvent companies employed less than five people, whereas only 1.7 per cent employed more than 51 employees. In 2015 there were less than 100 insolvency cases involving turnover of more than €50 million.

Although all industry sectors show decreasing numbers of insolvency cases, a significant drop can be seen in the service sector (of 6.2 per cent), although this sector continues to have the most insolvencies (55.9 per cent of all corporate insolvencies). In contrast, the construction sector has the highest insolvency quota in comparison with the number of companies (92 out of 10,000). This is followed by commercial enterprises (73 out of 10,000), service industries (65 out of 10,000) and the manufacturing sector (39 out of 10,000).

A person is most likely to be employed in an insolvent company if he or she works for cleaning companies, household moving companies, restaurants and cafes. More secure professions include being an accountant or provider of kindergarten services.

The average insolvency quota was reduced from 68 to 66 insolvencies out of 10,000 companies in 2015.

III PLENARY INSOLVENCY PROCEEDINGS

Since mid-2015 several insolvency proceedings occurred that were significant or had substantial press coverage. The following cases are not exhaustive and shall only serve as an example for various peculiarities.

i Imtech Germany GmbH & Co KG

In August 2015 Imtech Germany GmbH & Co KG became insolvent. The company is the German subsidiary of Dutch Royal Imtech NV, a worldwide real estate development company. More than 4,000 employees were affected in Germany at more than 960 work sites. Imtech Germany is involved in many major construction site operations; in particular, it plays a substantial role in building the new Berlin airport.

Imtech Germany accumulated losses over the past two years (€202 million in 2013, €80 million in 2014) as a consequence of some major projects that turned out to be unprofitable.

The company had to file for insolvency as debt restructuring measures at the parent level failed and Dutch Royal Imtech NV stopped financing Imtech Germany. Furthermore, according to press coverage the company lost millions of euros by making illegal arrangements or bribing a manager of the Berlin airport project.18 Several prosecution offices are looking into these aspects and are accusing former Imtech Germany managers of bribery, falsification of balance sheets and illegal price arrangements.

Several German subsidiaries of the Dutch parent company had to file for insolvency. One of these, Imtech Brandschutz GmbH, successfully filed for self-administration proceedings in August 2015 and the assets were sold to an investor in October 2015.

The IA, Mr Alexander Borchardt, successfully generated new money for Imtech Germany through an agreement with the banks and started the sale of assets.

In November 2015 the Kurt Zech group took over business operations under the name of ROM technic and a significant part of the assets of Imtech Germany. The jobs of approximately 50 per cent of employees were secured. However, almost 2,000 employees lost their jobs.19

ii Steilmann SE

Steilmann SE, a listed company from Bochum, is an apparel company producing womenswear, menswear and accessories, predominantly in the value segment of the market. The company, which was founded in 1958, was operating in 18 countries and had a work force of 7,000 employees of which 1,700 were based in Germany.

As a result of growing market pressure in the fashion sector and change of customers’ shopping preferences, the company accumulated losses. Several restructuring programmes were implemented over the past 10 years but none were successful.

In March 2016, only five months after going public and being listed on the Frankfurt Stock Exchange, Steilmann SE had to file for insolvency after negotiations with potential investors failed.20

Assets of the company are currently being sold by the IA Frank Kebekus, but several branches and shops had to close permanently.

Steilmann is a prominent example of the difficulties the retail sector, and in particular traditional apparel companies that concentrate on high-street shops, are currently facing (see Section V.iii, infra).

iii German Pellets GmbH

Another major insolvency case in 2016, currently ongoing, involves German Pellets GmbH, one of the world’s largest producers of wood pellets for heating. In 2015 the company had a turnover of €442.5 million in the first three-quarters of the year.21 The insolvency case affects more than 17,000 creditors as the company had issued several bonds amounting to more than €250 million. This makes it the biggest insolvency case in 2016 thus far.

In February 2016, the company announced it would not be able to cover one bond, and one day after that it filed for insolvency. The dramatic decline in oil prices, lower pellet revenues resulting from two warm winters, a bad investment the company made in 2010 and very high interest rates on the bonds made the company running out of money were factors.22

Assets of the company, including several production facilities, were already sold. Among others, the US financial investor Metropolitan Equity Partners took over the main factory in Wismar, Germany.

iv Unister Holding GmbH

The insolvency of Unister Holding GmbH started with a spectacular plane crash in July 2016. Thomas Wagner, founder and CEO of the Unister group, died in a mysterious airplane accident in Slovenia returning from a trip to Italy in order to collect more money for the company. A lot of cash was found at the crash site that, according to press coverage, was counterfeit and had been given to Mr Wagner by a deceitful investor in Italy.23

The company owns several dozen popular travel websites such as www.fluege.de and www.ab-in-den-Urlaub.de.

The Unister Holding GmbH has received constant negative attention over the past few years. The German consumer association Verbraucherzentrale criticised, among other things, the high additional fees for certain payment methods and other kinds of fraud on their websites.24

Only days after the plane crash, the company and several subsidiary companies filed for insolvency.25 It seems that the company had very limited financial resources and the tragic loss of Mr Wagner and further management personnel triggered the insolvency. The PIA Lucas Flöther is currently continuing with the business of the insolvent companies and has started the merger and acquisition process.26 Many customers who had bought travel packages using Unister websites are currently unsure if their journeys are still valid. 27

iv ANCILLARY INSOLVENCY PROCEEDINGS

Generally, ancillary insolvency proceedings do not play an important role in Germany. There have been no significant recent proceedings although the German Federal Court published one recent decision. The Federal Court states that creditors can still pursue their claims in an ancillary proceeding in Germany even if the debtor has already been discharged in the main procedure in England.28

V TRENDS

On a general note, it is not expected that insolvency metrics will change substantially within the next 12 months. As the German economy is stable, corporate insolvencies are expected to remain at a low level.

However, trends can be observed in other sectors.

i Reform of right to set aside transactions

In September 2015, the German government issued a draft for reforming the right of IAs to set aside transactions that occurred prior to insolvency proceedings and were detrimental to creditors.29 The main focus of the government bill is to reduce the IA’s power to set aside certain transactions in relation to scope and time.

It is expected that the reform will come into force in 2017.

ii Out-of-court restructuring initiative

On 12 March 2014 the European Commission published a recommendation calling for the implementation of a legal framework for efficient pre-insolvency restructurings as part of the general harmonisation of European insolvency law.30 According to the recommendation, national legislators should provide for out-of-court restructuring proceedings available to debtors that are likely to become insolvent. The European Commission pursued its goals by publishing an action plan in September 201531 and conducted an European consultation process in spring 2016.

This European initiative fuelled the long-existing discussion in Germany as to whether the country needs a special out-of-court restructuring regime. Many experts think that Germany is lacking an important restructuring tool because cramdown proceedings in out-of-court-restructurings are not possible under existent law. As a result some companies use foreign restructuring rules, in particular the English scheme of arrangement. Several pressure groups started initiatives in order to persuade the German government to present an out-of-court restructuring bill. However, at the moment it seems more likely that the European Commission will present a European bill containing suggestions for such tools at the end of 2016 or beginning of 2017.

iii Retail sector turmoil

Steilmann SE is not the only company in the retail sector suffering from recent fundamental changes concerning customers’ preferences, sale channels and city developments over the years. Further insolvencies in this sector occurred for the Pohland group and the Zero group in 2016. Both companies operated several retail shops in small and medium-sized cities.32 In addition, other companies such as Gerry Weber, Tom Tailor and Hugo Boss had to close stores and lay off part of their workforce.33

One reason for the crisis of the clothing retail sector is the change of consumer behaviour as people tend to spend less money on specific retail fashion chains. Furthermore, there is high competitive pressure in the clothing retail industry and a lot of companies dominate the market with products from the low-price segment, such as Primark.

Also, a lot of companies in the medium-price segment ignored the online shopping trend and cannot survive through high-street shops alone.

iv Online debt trading

Fintech is one of the big words in 2016. The industry constantly creates new models for trading financial products including distressed debts. While debt funds are a continuing trend and Germany recently lowered the hurdles to operate and offer debt funds, another new trend is online debt trading regarding claims against insolvent companies. Creditors who own claims against insolvent companies can sell these claims via internet auction platforms to buyers who offer the best price. While the concept is not new, fintech service providers fuelled the market recently. One of the leading European platforms is based in Germany and in March 2016 stated that since 2012, claims exceeding €1.4 billion have been traded by banks, institutional investors and other creditors over the platform ‘Debitos’.34 It is yet to be determined whether this will be a continuing trend or a mayfly.

Footnotes

1 Andreas Dimmling is a local partner at GSK Stockmann + Kollegen. The author would like to thank Franziska Poxleitner, law trainee, for her very valuable contribution to this publication.

2 An English version of the GIA is available at www.gesetze-im-internet.de/englisch_inso/.

3 For example, see InsO-Studie 2015 by McKinsey & Company and Noerr: www.noerr.com/~/media/Noerr/PressAndPublications/News/2015/insolvenzstudie/Insolvenz-Studie-DE_kurz.pdf.

4 Sections 49 to 51 of the GIA.

5 Section 38 of the GIA.

6 Section 39 of the GIA.

7 Sections 53 to 55 of the GIA.

8 Section 129 et seq. of the GIA.

9 German version of the bill is available at: www.bmjv.de/SharedDocs/Gesetzgebungsverfahren/Dokumente/RegE_Anfechtungsrecht.pdf?__blob=publicationFile&v=1.

10 Between 1999 and 2007 only in 0.5 per cent of all corporate insolvencies an insolvency plan was put in place; the same applies to self-management, although rates with regard to self-management increased between 2008 and 2012: Beck/Depré, Praxis der Insolvenz, p.1421, 1509; Münchener Kommentar, InsO, 3rd ed. 2014, Vor Sections 217–269, No. 64; Schultze&Braun Insolvenzplan-Index 1999–2012: www.schubra.de/de/veroeffentlichungen/insolvenzstatistiken/Insolvenzplanindex1999bis2012.pdf.

11 InsO-Studie 2015 by McKinsey & Company and Noerr: www.noerr.com/~/media/Noerr/PressAndPublications/News/2015/insolvenzstudie/Insolvenz-Studie-DE_kurz.pdf.

12 Section 217 of the GIA.

13 It should be noted that this EU Regulation will be replaced by EU Regulation 2015/848 as of 26 June 2017.

14 For example, Sections 16, 77b, 78, 88 and 88a of the Insurance Supervision Act, and Section 16 of the Insurance Contract Act.

15 For this and following figures, see Creditreform, Insolvenzen in Deutschland, 1. Halbjahr 2016: www.creditreform.de/fileadmin/user_upload/crefo/download_de/news_termine/wirtschaftsforschung/insolvenzen-deutschland/Analyse_Insolvenzen_in_Deutschland_1._Halbjahr_2016.pdf.

16 6 per cent of the workforce in July 2016 equalling 2.66 million individuals.

17 The total number of insolvency cases in Germany was 126,200 in 2015. Thus, more than 80 per cent are individual bankruptcy proceedings or similar cases.

18 www.handelsblatt.com/unternehmen/dienstleister/gebaeudeausruester-entwarnung-fuer-den-berliner-flughafen-ber/12186506-2.html.

19 www.wiwo.de/unternehmen/dienstleister/uebernahme-durch-zech-aus-imtech-deutschland-wird-rom-technik/12580706.html.

20 www.creditreform.de/fileadmin/user_upload/crefo/download_de/news_termine/wirtschaftsforschung/insolvenzen-deutschland/Analyse_Insolvenzen_in_Deutschland_1._Halbjahr_2016.pdf.

21 www.sueddeutsche.de/wirtschaft/german-pellets-angst-vor-einem-zweiten-prokon-1.2827987.

23 www.manager-magazin.de/unternehmen/it/tod-von-unister-gruender-thomas-wagner-wie-geht-es-weiter-bei-unister-a-1103179.html.

24 www.verbraucherzentrale.de/unister-insolvenz.

25 www.lvz.de/Specials/Themenspecials/Die-Akte-Unister/Unister-meldet-Insolvenz-an-Geschaeftsbetrieb-laeuft-weiter.

26 www.unister.de/faq-insolvenz/.

27 www.spiegel.de/wirtschaft/unternehmen/unister-verunsicherung-von-reisenden-waechst-a-1107773.html.

28 BGH NZI 2014, 969.

29 www.bmjv.de/SharedDocs/Gesetzgebungsverfahren/Dokumente/RegE_Anfechtungsrecht.pdf?__blob=publicationFile&v=1.

32 www.berliner-zeitung.de/wirtschaft/modeketten-in-der-krise-nach-steilmann-rutscht-auch-zero-in-die-insolvenz-23829622-seite2; https://www.derhandel.de/news/unternehmen/pages/Modehandel-Pohland-meldet-Insolvenz-an-11846.html.

33 www.focus.de/finanzen/news/steilmann-ist-kein-einzelfall-viele-bekannte-modemarken-stecken-in-der-krise_id_5384819.html.

34 www.debitos.de. See also: www.creditreform.de/nc/aktuelles/news-list/details/news-detail/zweitmarkt-fr-insolvenzforderungen-forderungsbrse-debitos.html.