The Federal Statistical Office (DeStatis) reported in November that the creditors in insolvency proceedings terminated until the end of 2014 could only record an average recovery rate of 2.6% of their original claims (recovery ratio).
Until 8 November the month began rather “ordinary” and did not continue the rebound from September. Obviously, everybody was waiting for the outcome of the US Presidential elections. And then the unthinkable (at least from the viewpoint of the MSM) happened – Trump was voted President. And then, again, the unthinkable happened: stocks did not only NOT crash but – especially in the US – started a rally rarely seen.
With a judgment published in May 2016, the German Federal Court of Justice (“Bundesgerichtshof”, “BGH”) further tightened the requirements creditors have to meet in order to defend a claw-back of monies received prior to insolvency according to sec. 133 German Insolvency Act (“Insolvenzordnung”, “InsO”).
In September 2016, I published a comprehensive analysis (in German) of the potential impact of an economic crisis on the restructuring prospects for companies in Germany. The analysis is based on a total of seven theses, which I discussed in a (non-representative) survey among representatives from banks, funds, research and consulting.
August remained a relatively quiet month – especially in comparison to June and July. The developments of the previous months (and the season) only took a small toll on the current German economy. However, the outlook has deteriorated.
Amid Brexit, the Turkish Coup and now also terrorist attacks on its soil, the German economy overall remains strong in July 2016:
On 30 September 2015, the EU-Commission issued an action plan for the “realization of a capital markets union”. Therein, the Commission announces the presentation of a “legislative initiative” for the last quarter of 2016 which shall include the EU-wide implementation of “early restructuring procedures”. This initiative might present an ice-breaker for the German debate over a “pre-insolvency restructuring procedure” which has been stalled since 2011 after the ESUG.