While the Grand Coalition has so far only dealt stepmotherly with the third stage of the insolvency law reform during the now expiring legislative period, it’s actions seems seem to get pace at the very last minute as the recent introduction of a “group insolvency law ” into the German Insolvency Act illustrates.
After the German Bundesrat had issued its latest opinion on the project regarding the introduction of a group insolvency law already on October 15th, 2013 (!), the standstill came to an abrupt end now – similar to the previous reform of the avoidance provisions (cf. here) – with the German Bundestag adopting the “Draft Law for Facilitating the Handling of Group Insolvencies” on March 9th, 2017.
The reform is intended to facilitate the reorganization of corporate groups; as a consequence, the old principle of German insolvency law: “a person, a property, an insolvency proceeding” will at least be softened. With the new law in place, the respective individual procedures may be centralized in one insolvency court in order to increase the opportunity to reorganize the group. In addition, the insolvency court may appoint a so-called “procedural coordinator” to better coordinate the individual procedures. Accordingly, there will also be a group creditors’ committee and a so-called “coordination plan” (= “group insolvency plan”).
Obviously, this new regulation involves an increased complexity on the procedural side. It remains to be seen whether this will merely reflect the already existing complexity within group structures and thus help to improve the efficiency of the process, or – as many associations already feared on the occasion of the draft proposal for 2013 – itself create a new unnecessary complexity.
The entry into force of the Group’s insolvency law is expected until the summer of 2017.