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Obligation to file for bankruptcy for companies affected by the flood: Cabinet decides to stay

2021-08-04T10:46:39.577Z

According to the will of the federal government, companies that find themselves in dire straits due to the devastating flood in July should not have to file for bankruptcy by the end of October. The Bundestag will have to approve this in a special session.



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Finance Minister and SPD candidate for Chancellor Scholz on Monday in Gemünd, a destroyed district of Schleiden

Photo: Oliver Berg / dpa

In order to save companies affected by the flood disaster in West Germany, the Federal Cabinet has spoken out in favor of a temporary suspension of the obligation to file for insolvency. "Due to the heavy rain and the floods, companies that have viable and successful business models, through no fault of their own, got into financial hardship," said Justice Minister Christine Lambrecht after the decision.

In order to help people and companies in the affected regions, extensive financial aid has already been launched, said the SPD politician.

"But we have to prevent companies from having to go to the bankruptcy court only because support services, such as the assistance we have decided, do not reach them on time." Therefore, the obligation to file for insolvency for affected companies should be suspended retrospectively from July 10, 2021 to the end of October 2021 become.

Suspension should only apply to "viable business models"

SPD finance minister and candidate for chancellor Olaf Scholz had already announced this on Monday during a visit to the affected region. This should allow companies to buy time, for example, to avail themselves of economic aid and to be able to react to the challenges of the severe weather disaster.

The federal government has already had extensive experience with the suspension of the obligation to submit applications during the corona crisis.

In this way, a wave of bankruptcies was prevented in the pandemic - in the worst case, however, already ailing companies are artificially kept alive.

In the event of the flood, according to the Ministry of Justice, aid should therefore be given to companies with “viable and successful business models” who would not be threatened with bankruptcy without the storms and for which, according to the draft law, “there are reasonable prospects of restructuring”.

Extension to March 2022 considered

Another prerequisite for a suspension of the obligation to file for insolvency is that the insolvency or over-indebtedness of companies is based on the effects of the heavy rainfall and the floods in July 2021.

An extension of the suspension of the obligation to file for insolvency is planned until the end of March 2022 at the latest.

The Bundestag has to approve the law.

From a technical point of view, the cabinet decided to provide formulation assistance for the coalition factions.

This makes a special session of the Bundestag during the summer break more and more likely.

According to insiders, a special meeting could take place as early as next week so that companies can have clarity quickly.

However, the parliamentary managing directors of the coalition factions Michael Grosse-Brömer (CDU) and Carsten Schneider (SPD) sent a letter to the opposition factions of the FDP, the Greens and the Left on Monday, according to which they “at the present time do not need a special meeting of the German See the Bundestag this week «.

But you also wrote: "If there is a need for legislative action in the near future and the specific templates are available, we are of course ready to take the necessary steps."

apr / Reuters / dpa

Source: spiegel

All business articles on 2021-08-04

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