COVID-19 – Temporary Suspension of the Obligation to File for Insolvency in Germany


For companies that experience financial difficulties as a result of the Coronavirus (COVID-19) epidemic, the obligation to file for insolvency will be temporarily suspended until September 30, 2020. This was announced by the German Federal Ministry of Justice in a press release on March 16, 2020  (available in German here).

In Depth

According to the ministry, the draft bill has been prepared, and a first reading in the Bundestag is scheduled for March 25, 2020. It is expected that the law will come into force this month. According to the aforementioned press release, the temporary suspension of the obligation to file for insolvency will be subject to the following conditions:

  1. The occurrence of illiquidity or over-indebtedness results from the effects of the COVID-19 epidemic.
  2. There must be reasonable prospects of a going-concern based on the application for public assistance or serious financing or restructuring negotiations.

The suspension of the obligation to file for insolvency will therefore be limited to companies that face financial difficulties due to the COVID-19 epidemic. The precise details of the other requirements have not yet been determined. However, a key prerequisite could be that the relevant company has already applied for concrete assistance from the federal government’s financial assistance package. This is indicated in the press release where it states that the suspension of the obligation to file for insolvency is intended to flank the aid measures adopted by the federal government  to support liquidity. It should be avoided that affected companies have to file for insolvency solely because the processing of applications for public assistance, financing or restructuring negotiations  could not be completed in time.

It is presumed that the exact text of the law will be made public in the March 25 reading in the Bundestag.

In addition to a suspension of the obligation to file for insolvency pursuant to section 15a InsO, the accompanying regulations on payment prohibitions of the management of a GmbH, AG or GmbH & Co. KG according to § 64 section 1 sentence 1 GmbHG; § 92 section 2 sentence 1 AktG; § 177a in conjunction with § Section 130a para. 1 HGB must be adjusted for clarification purposes.