The laws enacted by the legislator at the end of March 2020 to mitigate the consequences of the corona virus pandemic (“Corona Consequences Mitigation Act” („Corona-Folgen-Abmilderungsgesetz“), see here for details) were limited in time and would have mostly expired at the end of September 2020. In view of the ongoing pandemic, some of the relevant regulations have now been readjusted, but extended in total at least until the end of 2020.
Thus, on Thursday, 17 September 2020, the German Bundestag adopted a draft amendment to the Covid 19 Insolvency Suspension Act (“COVInsAG“) submitted by the parties of the governing coalition following amendments proposed by the Legal Affairs Committee (see here for details of the discussions and the current status, in German).
The core of this regulation (already discussed here) is the extension of the (limited (!)) obligation to file an insolvency petition for over-indebtedness according to § 19 InsO suspended by the COVInsAG. On the other hand, the obligation to file for insolvency due to inability to pay according to § 17 InsO will be revived without restriction (!) from 1 October 2020 onwards.
On 18 September 2020, the BMJV then submitted a draft for the extension of various other provisions of the Corona Consequences Mitigation Act, namely the “GesRGenRCOVMVVV”. This regulation aims to regulate the extension of the validity of various measures in company, cooperative, association and trust law to combat the effects of the COVID 19 pandemic until 31 December 2021. This will allow companies of affected legal forms as well as associations and foundations to continue to be able to take decisions even if the restrictions caused by the COVID 19 pandemic continue to apply.
Conclusion: There is no doubt that the pandemic and its consequences will continue to accompany us in our daily lives half a year after the adoption of the Corona Consequences Mitigation Act. With the rapid implementation of the “StaRUG” (see here for more details), the legislator has also shown that it has its sights set on the long-term fight against the consequences of the crisis. The differentiated further suspension of the obligation to file for insolvency only for over-indebtedness could now be taken as evidence that it also has its sights set on avoiding a “zombification” of the German economy. However, “business zombies” are often characterised by the fact that they can just take out loans, but – in the spirit of Minsky (see here) – are already so over-indebted (!) that they are no longer able to repay even the interest for these loans from their own own business profits. In doing so, however, the Federal Government is extending the life of these zombies by another three months. On the other hand, one simply has to say that after ten years of low interest rates, which made the zombies sprout in the first place, this short prolongation (if it ends there) is not really relevant any more.
(All in German)