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International Corporate Rescue

COVID-19: A quick and effective, cost-efficient 'German Scheme'

Implementation of the EU Directive on Restructuring and Insolvency

Frankfurt am Main, 22.09.2020. In the ICR (International Corporate Rescue) article our colleague Tammo Andersch and Ursula Schlegel (German lawyer and English solicitor) propose solutions for the imminent ‘German Scheme’ (driven by the EU Directive on Insolvency and Restructuring’) against the background of the aftermath of COVID-19 challenges.

Ursula and Tammo suggest that the ‘German Scheme’s’ milestones, i.e. likelihood of insolvency, drafting and negotiation of the restructuring plan and the prospects of the restructuring plan to prevent insolvency should build into a modular system to be time and cost efficient; with the court, when confirming the restructuring plan, using the expert reviews underpinning these modules. It is also proposed for the expert providing such reviews to be appointed as PIFOR.

The article crosses with the draft law on the same subject published by the German Ministry of Justice (BMJV) two days ago, a draft law proposing – inter alia – a modular system for the imminent German preventive restructuring framework. Representatives of the German insolvency/restructuring industry are invited to comment on the draft law by 2 October 2020.

(The ICR article was based on a German article published by Ursula and Tammo in German magazine INDat Report on 29 April 2020.)