RESTRUCTURING FRAME StaRUG 2021

Innovations of the methods

On July 16, 2019, Directive (EU) 2019/1023 on preventive restructuring frameworks entered into force. Its implementation into the national law of the member states is eagerly awaited by restructuring specialists against the background of declining growth forecasts and warnings of an economic slump. The Stabilization and Restructuring Framework (StaRUG, previously referred to in the discussion as: preventive restructuring framework) will significantly change the restructuring of companies in Germany. 

Who will it apply to, who can take advantage of it and who will come to the fore?

 

The Department R A 6 in the Federal Ministry of Justice is rarely the focus of media attention. Alexander Bornemann, the head of the government, works calmly and systematically with a small team on the refinement of German insolvency law; usually this is hardly good for the headlines.

But since March there has been no trace of calm. In Bornemann’s department, weekend shifts are increasing rapidly: in a fast-track procedure, his troops launched the “Covid 19 Insolvency Suspension Act”. It allows the managers of pandemic-damaged companies to waive their right to go to the insolvency court until the end of September, provided there is a prospect of restructuring. Parts of the regulation are to be extended until 2021, and over-indebted companies will probably still not have to file for insolvency.

Excerpt from one of the current statements in the business magazine (follow the link for the full article) 

Frank Jäger
Senior Expert Partner

Dr. Maren Schweizer
Senior Expert Partner