The rising energy prices pose major financial challenges for many companies. Managing directors must ensure that an insolvency petition is filed in a timely manner.
According to company law, managing directors or executive bodies are obliged to file for insolvency without delay, at the latest within three weeks, when insolvency is imminent. Reasons for the onset of insolvency include over-indebtedness or inability to pay of the company. If the insolvency petition is not filed in a timely manner, the managing director or executive bodies are liable.
During the coronavirus pandemic, the obligation to file for insolvency was temporarily suspended. Meanwhile, many companies are facing new difficult challenges due to disrupted supply chains and high energy prices. Currently, there is no renewed suspension of the insolvency filing obligation. Due to the high liability risk, it should be examined in a timely manner whether there is a reason for insolvency and an insolvency petition must be filed, says attorney Michael Rainer, contact person for company law at MTR Rechtsanwälte.
In the event of insolvency or over-indebtedness, there is an obligation to file for insolvency. Inability to pay occurs when the liquid funds are no longer sufficient to meet payment obligations.
Decisive for the due date of the payment is a due date agreement or a corresponding legal requirement. One way to delay the due date is deferment. Through deferment, the onset of insolvency can potentially be avoided. It is important that a deferment does not necessarily require an agreement with the creditor; it can also occur implicitly. According to prevailing case law, an implicit deferment exists when there is a lack of serious demand for the debt by the creditor.
Over-indebtedness exists when the company’s assets no longer cover the liabilities, unless the continuation of the company is predominantly likely.
To prevent imminent over-indebtedness, the company has various options. For example, it can bring in fresh equity to ensure that over-indebtedness does not occur. Another option is the conversion of loan liabilities into equity in the form of a so-called debt-equity swap. This means: The creditor contributes his claims as equity, thus providing a capital increase. Over-indebtedness can also be averted through the creditor’s waiver of claims.
Lawyers experienced in insolvency and company law provide advice on avoiding insolvency.
