Now it’s official – the SanInsFoG came into force (at least in its most important parts) on January 1, 2021. And already, the first reform is just around the corner: the pandemic-related further extension of the “COVInsAG”. After the smoke has cleared from the trench warfare over the design of this next “reform of the century”, which after a decade of discussion has finally given birth to something like a “pre-insolvency restructuring mechanism”, I will (as already promised at the end of last year, here) take a more in-depth look at specific aspects of this reform work in a small series.
At present, the partly newly regulated insolvency grounds, the obligation to file an application and the consequences of delaying or failing to file an application which were reformed by the German “Bill for the development of turnaround and insolvency law” (“Gesetz zur Fortentwicklung des Sanierungs- und Insolvenzrechts (Sanierungs- und Insolvenzrechtsfortentwicklungsgesetz – SanInsFoG“) are likely to be more relevant in practice than the provisions of the German “StaRUG” (“Gesetz über den Stabilisierungs- und Restrukturierungsrahmen für Unternehmen (Unternehmensstabilisierungs- und -restrukturierungsgesetz – StaRUG“, the German implementation on the EU-Directive on the “preventive restructuring mechanism”, cf. already here and here ) , which is why I will deal with these first.
One aspect of the reform that has received little attention so far in my view concerns the relatively narrow limitation of the forecast periods for the solvency forecast of the new § 18 InsO and the continuity forecast of § 19 InsO. Thus, the newly inserted § 18 (2) sentence 2 InsO stipulates that “as a general rule, a forecast period of 24 months is to be taken as a basis“. In contrast, the newly formulated § 19 (2) Sentence 1 InsO now defines the “next twelve months” as the time window for the prognosis of continued existence (“Fortbestehensprognose“). In this way, the legislator shortens the forecast periods, which were sometimes interpreted excessively by the courts, and at the same time finally creates a clear (temporal) distinction between imminent insolvency and over-indebtedness. German insolvency law is thus once again becoming more legally secure and more manageable in practice, which is to be welcomed without reservation. As long as the provisions of COVInsAG apply, however, it should be noted that under Section 4 COVInsAG the forecast period is only four months if the debtor’s overindebtedness is attributable to the COVID 19 pandemic. To this end, the regulation also establishes corresponding presumption rules (no over-indebtedness on December 31, 2019, positive result from the last fiscal year before January 1, 2020 and sales slump in the operating business by more than 30%).
In § 1 StaRUG, the legislator has established a general obligation to maintain early crisis detection systems in companies to accompany these forecast periods (and the resulting deadlines). Although it remains to be seen whether this will result in a general corporate planning obligation, initial authors have derived from the interaction of Section 1 StaRUG and Section 18 InsO at least the obligation to operate a rolling 24-month liquidity planning system in the company.
The original sections 2 and 3 of the StaRUG provided for a shift in managerial duties away from safeguarding the interests of the company to safeguarding the interests of creditors upon the occurrence of imminent insolvency (so-called “shift of fiduciary duties”). However, these duties and liability rules were deleted without replacement during the legislative process, partly because it was feared that the liability risks for the managing directors would be too high. However, the subsequent case law of the German Federal Court of Justice (Bundesgerichtshof, BGH) will show whether corresponding obligations of the management cannot be derived from the duties established in § 1 StaRUG.
In the event of the occurrence of the insolvency grounds of insolvency pursuant to § 17 InsO or over-indebtedness pursuant to § 19 InsO, the obligation to file for insolvency remains in place. However, the legislator has used the reform to also modify the corresponding provision of § 15a InsO. In principle, unless this obligation is suspended under the COVInsAG, the application must still be filed “without undue delay” after the aforementioned insolvency grounds have occurred. While the maximum period for illiquidity remains at three weeks, it has been extended to six weeks for over-indebtedness.
Finally, with the introduction of the new § 15b InsO, the legislator has merged the various provisions on the liability of managing directors in the event of unjustified payouts after the occurrence of insolvency, which had previously been distributed across the corresponding laws on the various company forms, and deleted the respective special-law provisions. This leads, for example, to the abolition without replacement of the previous § 64 GmbHG. As before, § 15b (1) InsO provides for a payout ban after the insolvency grounds of illiquidity and/or over-indebtedness have occurred. In the other paragraphs of this standard, however, the legislator has not simply adopted established case law, but has also set its own accents in some cases. Following the previous case law of the BGH, § 15b (2) InsO now explicitly states that the prohibition of disbursements does not apply to payments “which are made in the ordinary course of business, in particular payments which serve to maintain business operations, [wbich] shall be deemed to be consistent with the due care and diligence of a prudent and conscientious manager, subject to subsection 3.” However, only such payments that are made within the period for filing the petition and only to the extent that and for as long as the parties subject to the petition take measures for the sustained elimination of the insolvency grounds or for the preparation of an insolvency petition with the due care and diligence of a prudent and conscientious business manager shall be privileged under the tort provisions. In addition, payments made after the filing of the insolvency petition until the opening of insolvency proceedings with the consent of the (weak) preliminary insolvency administrator shall also be considered privileged.
After the expiry of the application period, payments are generally deemed to be inconsistent with the due care and diligence of a prudent and conscientious business manager, cf. § 15b (3) InsO. In doing so, the legislator may be breaking with the privileged treatment of payments to social security institutions or tax authorities that had been recognized by case law up to that point. However, § 15b (8) InsO also provides that if the application is filed in good time, there is no breach of payment obligations under tax law if claims arising from the tax debt relationship are not met or not met in good time during this period.
Finally, through the provision of § 15b (4) InsO, the legislator attempts to limit the scope of liability for mass-diminishing payments. Accordingly, the managers are now only liable to the extent of the damage incurred by the creditors if the manager succeeds in proving that the actual damage is less than the total amount of the payments made.
Conclusion: With the introduction of a general obligation to identify crises at an early stage, the complementary sharp demarcation from the forecast periods of §§ 17 and 19 InsO, the cautious extension of the obligation to file an application in the event of over-indebtedness and a summary (which at first glance appears to be consistent) of the previous statutory provisions and case law rules on liability in the event of payments after insolvency, the legislator has created a consistent canon of obligations which intensify depending on the stage of the crisis. It is to be congratulated on the deletion of the early “shift of fidiuciary duties” originally contained in the StaRUG, if only because this construct would have opened the door to infinite liability risks without necessity. Now it is up to the jurisdiction of the BGH to deal responsibly with these requirements and not to expand liability scenarios again.
Gesetz zur Fortentwicklung des Sanierungs- und Insolvenzrechts (Sanierungs- und Insolvenzrechtsfortentwicklungsgesetz – SanInsFoG), BGBl, 2020, 3256 (in German)
RegE eines Gesetzes zur Fortentwicklung des Sanierungs- und Insolvenzrechts (in German with extensive reasoning)