On December 17, 2020, the German Bundestag passed the Act on the Further Development of Restructuring and Insolvency Law. This law came into force on 01.01.2021.

Previously, an out-of-court reorganization of a company in a crisis situation was only possible with the consent of all creditors. Also, the company did not have the possibility to terminate continuing obligations at short notice.

The above-mentioned Act creates a legal framework for out-of-court reorganization that enables companies to reorganize on the basis of a plan that has been approved by a majority of creditors. It is therefore no longer possible for an individual creditor to torpedo the reorganization outside of insolvency proceedings.

The requirements in detail:



Reorganization proceedings outside of insolvency can only be considered for companies which do not have to file for insolvency. A company, such as a GmbH or an AG, must file for insolvency if it is insolvent (§ 17 (2) InsO) or over-indebted within the meaning of § 19 (2) InsO.

The legislator stipulates that the non-insolvency reorganization procedure requires that there is only a threat of insolvency within the meaning of Section 18 (2) InsO.

Imminent insolvency means that the company is likely to be unable to meet its existing payment obligations when they fall due.


The company shall notify the restructuring plan to the restructuring court. The draft restructuring plan shall be attached to the notification. The restructuring court is the district court in whose district the respective higher regional court is located.

The core element is the restructuring plan. It contains a descriptive and a formative part. The illustrative part contains the restructuring concept, while the formative part contains the relevant legal amendments.

The creditors affected by the plan vote on it. Pursuant to Sec. 25 (1) StaRUG, acceptance of the restructuring plan is generally required so that at least 75% of the creditors in each group agree.

The preparation of the restructuring plan does not generally require judicial involvement. However, the court must confirm the plan.

A so-called restructuring representative can be appointed. However, the appointment should only be possible in exceptional cases, namely when it is necessary. The restructuring officer has a monitoring and advisory function.

It is important that employee claims are expressly excluded from a rule of the restructuring plan. The rule applies both to wage and salary claims and to company pension claims. The company in need of restructuring has no special rights under labor law. Unlike the insolvency administrator, it cannot claim shorter notice periods for employment relationships. It also does not have the option of terminating works agreements.

The works council must be informed of the restructuring measures. Because of the works council’s participation rights (reconciliation of interests and social compensation plan), the works council can demand that changes in operations be observed in accordance with the Works Council Constitution Act. However, the works council does not have the right to approve the restructuring plan. However, the restructuring plan is binding on the employer, so that it must implement the measures introduced in it.

The employer must also ensure that the restructuring plan does not invalidate the provisions on mass redundancies.


The restructuring procedure offers the possibility to reorganize the company in a favorable way in a regular insolvency. It also avoids a loss of reputation. However, the procedure still has considerable bureaucratic hurdles, but it can nevertheless be regarded as a simple way of reorganizing companies.


The debtor company is obliged to regularly check whether insolvency or over-indebtedness has occurred. In this case, the debtor must notify the insolvency maturity pursuant to Section 32 (3) StaRUG. If the debtor fails to comply with this obligation to notify the court that the debtor company is ready for insolvency or if the court is aware of other circumstances which indicate that the debtor company is ready for insolvency, the restructuring case shall generally be set aside.