As foreseen last, month, the Corona-Pandemic has inded cut into the German economy like a hot knife through an ice-cake – and it does not look good. But hey, let’s look into the German economy in some more detail:
After a rather short discussion on the various measures necessary to counter the economic effects of the corona virus pandemic (cf. for further information here (in German)), the legislator enacted a flood of bills on 25 March (“(German) Corona Consequences Mitigation Act”; “Corona-Folgen-Abmilderungsgesetz“). In a brief overview – focussing on the insolvency-specific regulations of the “COVInsAG” contained therein – I will try to evaluate the first experiences with the suspension of the obligation to file for insolvency.
The Corona-Pandemic is cutting through the global economy like a hot knife through an ice-cake – and the German economy is awaiting its „cut“ from the overall cake, so to say (or to stick last months parlour (here): awaiting its piece of sh*** coming back from the fan). But hey, let’s look into the German economy in some more detail:
Unless otherwise provided for in the articles of association (e.g. through the redemption of shares), the withdrawal of a shareholder’s status is generally only possible with the consent of the shareholder concerned. Especially in crisis situations, a shareholder could thus develop a blocking potential in order to either prevent a restructuring or to participate in it without any risk of his own. Over the years, however, the German Federal Court of Justice (“Bundesgerichtshof“, “BGH“) has restricted these blockade possibilities by means of differentiated case law. These possibilities could also be useful in the current corona crisis, which is why they will be briefly presented in the following overview.
So, although with a view to the ongoing meltdown in the global economy it might seem a little odd to look at last months figures, this makes sense – if only to ascertain the status before TSHTF. Since, even before the virus really hit, the German economy remained in a rather fragile state, as the January monthly showed (here). But, hey, let’s look into the German economy in some more detail:
While the last “Monthlies” pointed to a plateauing of the German economy (cf. here and here), the beginning of January marked the point where everybody began to take the threats emanating from the Corona-virus seriously. However, since the economic impact was only starting to gain traction, it is quite interesting to see how the German economy evolved prior to this crucial chain of events. But, hey, let’s look into the German economy in some more detail:
For numerous companies the financial year ended on 31 December 2019. Generally, the company’s managing directors are obliged to prepare the corresponding annual financial statements within certain time limits according to § 264 of the German Commercial Code (“Handelsgesetzbuch“, “HGB“). However, in the crisis of the company, these periods may be considerably shorter. Therefore, especially foreign shareholders of German corporations and their respective tax advisors (who are actually preparing the annual accounts for most of German companies) are strongly advised to observe the relevant regulations in order to minimize their own liability risks.
Securing corporate financing, especially liquidity, is a top priority not only in an acute crisis. However, a glance behind this corporate truism – usually presented with a weighty expression – immediately reveals a seemingly insoluble dilemma: in particular the advanced stage of the corporate crisis is characterized by a permanent lack of liquidity. The only … more