Noerr LLP: Hearing of the Legal Committee - Noerr expert demands further improvements in the course of the amendment of the Insolvency Act
(firmenpresse) - Noerr LLP / Key word(s): Law/
Noerr LLP: Hearing of the Legal Committee - Noerr expert demands
further improvements in the course of the amendment of the Insolvency
Act
DGAP-Media / 29.06.2011 / 16:42
Hearing of the Legal Committee - Noerr expert demands further improvements
in the course of the amendment of the Insolvency Act
Berlin, 29 June 2011
The success of the amendment of the Insolvency Act will significantly
depend on how practical the new provisions are. This is the conclusion
drawn by Rechtsanwalt Prof. Dr. Christian Pleister, head of the
restructuring practice of the leading European law firm Noerr, before
tomorrow's first reading of the bill in the federal parliament. Pleister,
who today participates as an expert in the public hearing of the legal
committee of the parliament on the draft ESUG (Act to facilitate
restructuring of companies), believes that the bill goes in the right
direction although changes are still required to important details.
In his view, changes are required particularly with regard to legal and
planning certainty in the insolvency plan process. 'So far, the draft still
has no deadline for the notification of claims', said Pleister. The
planning of the financing of the insolvency plan is, however, only possible
if the liabilities are finally established. 'The Karstadt insolvency plan
has shown that, due to the uncertainties in the calculation of the funds
necessary, a reserve must be retained.' Pleister therefore proposes that
the insolvency court in the decision opening the insolvency proceedings
should specify a deadline for the notification of claims. 'Only claims
notified before the deadline expires would be considered', said Pleister.
This would enable a precise calculation of the insolvency dividend and the
amount required for the restructuring would be clear to investors'. 'A
deadline of this kind is usual internationally in insolvency proceedings'.
The lack of the possibility of regulating third party security is also
unsatisfactory. Since shareholders with co-liability must expect to be made
personally liable in an insolvency, the making of insolvency applications
is delayed in practice and the objective of restructuring on the basis of
an early application frustrated. Pleister: 'The problem also arises in
group financing in which subsidiaries with co-liability are also forced
into separate insolvency proceedings because of the lack of provisions on
third party security - as the ESCADA case showed.' This endangers the
success of the entire group restructuring and damages Germany as a
restructuring location.
Finally, facilitation of Debt-Equity-Swaps would be beneficial. With this
instrument, creditors can convert their claims into equity and so actively
encourage the restructuring of an overindebted company. 'There is the risk
that a minority of creditors reject a planned Debt-Equity-Swap and so
frustrate the restructuring', said Pleister. He therefore suggests that the
relevant creditor group be enabled to approve the swap by majority
decision. 'This is already possible in the case of bonds under the Act on
Bonds, but should apply to all creditors in one group', according to
Pleister. 'Blocking by some creditors would be successfully overcome in
this way.'
Matthias Schulte
PR-Manager
Assessor jur.
Noerr LLP
Börsenstraße 1
60313 Frankfurt am Main / Germany
T +49 69 971477418
F +49 69 971477100
M +49 171 9777705
matthias.schulte(at)noerr.com
End of Media Release
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130216 29.06.2011
Datum: 29.06.2011 - 16:42 Uhr
Sprache: Deutsch
News-ID 34501
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