Centres of main interest

Author: | Published: 1 Sep 2007

The corporate restructuring of the Schefenacker Group was hailed as a triumph for the consensual approach taken by the principal stakeholders. Completed on June 29 2007, the restructuring used the migration technique to transform Schefenacker into a company with its centre of main interest in England. This allowed the company to use the cross-border recognition granted to a voluntary arrangement to restructure both operationally and financially, and to preserve 8,500 jobs as well as a multinational business.

German corporate and insolvency law provides a good environment for successful restructurings. German law provides an insolvency plan modelled on the US Chapter 11 scheme. Also, salaries of employees are paid by the federal unemployment agency for up to three months before the opening of insolvency proceedings. This can create value for creditors and offers a regular financing tool for restructurings, so there is usually no need to migrate. But each case...