SanInsFoG

The government draft of the Act on the Further Development of Restructuring and Insolvency Law (“SanInsFoG”) came into force on January 1, 2021. For the first time, it creates pre-insolvency restructuring instruments in German law with the Corporate Stabilization and Restructuring Act (“StaRUG”), which is intended to avoid insolvencies and facilitate restructuring. In particular, in creates the possibility to restructure old debts in a restructuring plan, even outside of insolvency, against the will of individual creditors. 

The SanInsFoG also adapts related areas of insolvency law and debtor-in-possession management to the evaluation of the ESUG (Act to further facilitate the restructuring of companies). Overall, this is intended to create a new four-stage restructuring regime which significantly strengthens the options for restructuring inside and outside of insolvency – including for managing COVID-19-related corporate crises. The company has the option to restructure outside of insolvency with or without a restructuring plan or to implement the restructuring during insolvency in debtor-in-possession management by a trustee or under the direction of an insolvency administrator. 

Our experts at the Restructuring Competence Center are always available to answer any questions you may have on this topic.