Countdown has begun to the biggest overhaul of Germany’s insolvency legislation, but lawyers predict more amendments are needed if the proposed reforms are to be effective.
According to Heiko Tschauner, head of business restructuring and insolvency at Hogan Lovells in Germany, the government’s draft law known as ESUG (Act to facilitate restructuring of companies) doesn’t go far enough on some points.
Andreas Spahlinger of Gleiss Lutz in Stuttgart agreed that more changes will be necessary to make German law fully competitive and to stop local companies moving elsewhere or using foreign restructuring laws.
Insolvency administrator
Three major amendments are set to come into force next year under ESUG. The first will make restructurings easier by enhancing the role of creditors.
“The idea is to strengthen the influence of creditors, particularly as regards the selection of an insolvency administrator” said Spahlinger.
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