By Andreas Kiler
BERLIN (Dow Jones) – The cabinet has initiated a suspension of the obligation to file for insolvency for companies damaged by the weather. The Federal Government has decided on a formulating aid presented by Federal Justice Minister Christine Lambrecht (SPD) for the coalition factions to temporarily suspend the obligation to file for insolvency due to the storm in July 2021, the Ministry of Justice announced. “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 Lambrecht.
It must be prevented that companies only have to go to the bankruptcy court because support services such as the aid decided by the government do not reach them in time. “That is why I proposed to suspend the obligation to file for insolvency for the companies concerned with retroactive effect from July 10, 2021 to the end of October 2021,” she said. This gives companies time, for example, to take advantage of economic aid and to be able to react to the challenges of the severe weather disaster.
The wording aid is now to be sent to the coalition factions in order to introduce a bill into the Bundestag on this basis. According to the information, it provides for a temporary suspension of the obligation to file for insolvency in cases in which the occurrence of insolvency or over-indebtedness of companies is due to the effects of the heavy rain and the floods in July 2021. The regulation is intended to benefit companies that have a viable business model, but for whom it is not ensured that government financial aid, for example, would arrive on time within the deadline for filing an insolvency application.
The regulation is to apply retrospectively from July 10th to October 31st. According to the information, the draft also provides for the ministry to issue statutory orders, so that the suspension of the obligation to file for insolvency could be extended until March 31, 2022 at the latest. “The Federal Ministry of Justice and Consumer Protection is authorized to extend the suspension of the obligation to file for insolvency no later than March 31, 2022 by means of an ordinance without the consent of the Federal Council, if this is due to ongoing demand for available public aid, ongoing financing or restructuring negotiations or other reasons Circumstances appear necessary “, it says in it.
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(END) Dow Jones Newswires
Aug 04, 2021 5:16 AM ET (9:16 AM GMT)