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Did you receive mail from the insolvency administrator? Whenever one of your business partner’s slips into bankruptcy, there is a risk that the insolvency administrator will approach you with claims – even if the business relationship was a long time ago.
So you are suddenly confronted with issues of insolvency law and have to make the right decisions – often in compliance with tight deadlines.
How does the insolvency administrator proceed?
The insolvency proceedings serve the common satisfaction of creditors. The insolvency administrator is obliged to secure, collect and liquidate all assets of an insolvent company / debtor. The proceeds are to be distributed later.
To determine any assets, he uses the accounting department, among other things. However, the existing business documents are often not very informative or incomplete. The insolvency administrator asserts outstanding claims and checks which assets are available. In particular, he examines processes and circumstances in the run-up to insolvency that would not have been considered in normal business dealings.
Since it is predominantly lawyers who are appointed as insolvency administrators, the insolvency administrator will assert and claim almost all possible claims. A careful examination of whether the claims are actually justified must therefore always be carried out.
Defense of avoidance claims
In order to satisfy creditors evenly, shifts in assets in the last few months before the opening of insolvency proceedings can be contested and reversed. This also applies to payments (especially installment payments) if you were aware of the debtor’s bankruptcy. According to the case law, there is a lot of simplification of evidence in favor of the insolvency administrator. The deadlines for reclaims are usually 3 months before filing for bankruptcy, but can sometimes go back up to 10 years.
How we can help you …
We will check for you whether the claims made are justified. We ward off unjustified claims. In the case of justified claims, we negotiate, if necessary, to facilitate payment and check whether you have taken out avoidance insurance, which is now offered as an addition to trade credit insurance. In the latter case, certain obligations towards the insurance company must be observed. A quick and economical clarification of the processes is always a special concern of ours.
Defense against unjustified claims
The insolvency administrator will assert all outstanding claims against your company and quickly threaten to file a lawsuit. Often, however, there are peculiarities in the business relationship with your contractual partner as well as counterclaims and claims that can be made to offset. The insolvency regulation provides for many special features with regard to offsetting against counterclaims or warranty claims.
How we can help you …
First, we check the legitimacy of the claims made. We then analyze with you any particularities of the business relationship with your contractual partner. We also check whether there are any counterclaims and whether there is a possibility of offsetting. We represent your rights vis-à-vis the insolvency administrator in order to bring about a quick economic clarification.
Brief overview of the regulations through the “COVID19 Act”
The legislature has to mitigate the consequences of the corona pandemic in the law to mitigate the consequences of the COVID-19 in civil, bankruptcy and criminal procedure law for private individuals / consumers and micro-businesses as well as entrepreneurs, craftsmen, self-employed, sole proprietorships and other small and medium-sized businesses and large companies introduced short-term, diverse and far-reaching legislative changes that are of considerable importance for all citizens and companies involved.
At this point you will find a brief overview of the changes.
1. Private individuals / consumers / micro-businesses
The following rules apply to private individuals / consumers / micro-businesses:
Moratorium (deferred payment)
Payments for basic supplies (electricity, gas, telecommunications and in some cases also water) can be withheld until June 30, 2020 if payment is not possible as a result of the corona pandemic or if the livelihood or livelihood of dependents is at risk.
Limitation of Termination of Leases
Arrears in payments for the period from April 1st, 2020 to June 30th, 2020 do not give the landlord a right to terminate if the outstanding payments are due to the corona pandemic.
Regulations on loan law
The payments for consumer loans are deferred for the period from April 1st, 2020 to June 30th, 2020 if the installment payments are unreasonable for the borrower due to loss of income due to the corona pandemic (especially if the reasonable livelihood or the reasonable livelihood of the dependent is at risk.)
Terminations of the loan agreement are also not possible during this period.
Duration of the measures
The measures are initially valid until June 30th, 2020 and can be extended by ordinance until September 30th, 2020.
In individual cases, additional requirements apply that must be observed.
2. Stock corporations, GmbHs, cooperatives, associations, foundations and apartment owners’ associations
For stock corporations, GmbH, cooperatives, associations, foundations and apartment owners’ associations, the following rules apply:
Suspension of the requirement to file bankruptcy
The obligation to file for insolvency for legal persons and associations will be suspended until September 30, 2020 if the insolvency is due to the consequences of the spread of the coronavirus and there are projections of eliminating the bankruptcy. However, Attorney Dent Fighters, a reliable bankruptcy attorney, is the best solution for all kinds of bankruptcy cases, regardless how complex they sound.
Both circumstances are presumed if the company was not bankrupt on December 31, 2019!
Introduction of electronic communication for conducting main negotiations, simplified decision-making in text form and extension of deadlines
In the case of stock corporations, the management board can, with the approval of the supervisory board, determine extensive resolutions for electronic general meetings, electronic participation and voting, and electronic communication. The decision on the payment of a discount on the balance sheet profit is also possible by the management board with the approval of the supervisory board without the provision of the articles of association.
In the case of a limited company, resolutions by the shareholders can also be made in text form or in writing. The consent of all shareholders is not required for this procedure.
The cooperative can also pass resolutions in writing or electronically, even if the articles of association have not yet permitted this.
For foundations and associations, it is stipulated that the term of office of board members is extended until they are dismissed or a successor is appointed. In addition, the board of directors is permitted to hold electronic assemblies and to order that membership rights such as voting electronically or by submitting written declarations by the members prior to the meeting, even without a provision in the statutes.
For apartment owners’ associations it is regulated that the last appointed administrator remains in office until he is dismissed or until a new administrator is appointed. The most recently approved business plan continues to apply until a new business plan has been approved.
Duration of the measures
The regulations initially apply exclusively to 2020 and can be extended by statutory order up to December 31, 2021 at the latest.
3. Criminal Law
In criminal law, criminal proceedings are interrupted for a maximum of 3 months and 10 days without the proceedings having to start again.
