Since 27.03.2020, companies in economic difficulties due to the COVID 19 pandemic have been released from the obligation to file for insolvency. This exemption is valid for all insolvency reasons until 30.09.2020 (see also our newsletter on the law to mitigate the consequences of COVID-19). On 02.09.2020, the Federal Government agreed on an extension of the suspension of insolvency until 31.12.2020, so that the extension can be expected to be adopted in September 2020.
It should be noted that the extension of the suspension of insolvency from 1 October 2020 applies exclusively to over-indebted but still solvent companies. The scope of application of the insolvency suspension is therefore likely to be extremely limited. Over-indebted companies are otherwise only subject to an obligation to file for insolvency if there is no positive forecast for continuation. Medium-term solvency is a key indicator of a positive going concern prognosis.
As a result, from 01.10.2020, debtors will be obliged to file for insolvency again in the event of insolvency and managing directors will be liable for payments after the insolvency has occurred. The consequence for creditors is that if they receive payments from customers and business partners in crisis from 01.10.2020 onwards, there is a risk that the insolvency administrator will reclaim them at a later date if the insolvency is contested. The protection provided by the law to mitigate the consequences of the Corona pandemic ended on this date.
THE AUTHOR AS WELL AS YOUR USUAL CONTACTS ARE AT YOUR DISPOSAL FOR QUESTIONS
Dr. Jan Hermeling
+49 211 8687 138