Calm before the storm covid19 and the business insolvency time bomb
Some companies become insolvent because their goods or services do not evolve to fit consumers’ changing needs. When consumers begin doing business with other companies offering larger selections of products and services, the company loses profits if it does not adapt to the marketplace. There are numerous factors that can contribute to a person's or company’s insolvency.
Reconciliation of interests pursuant to subsection shall replace the statement of the works council pursuant to section 17 subsection , second sentence, of the dismissals protection act. The first sentence shall not apply if the circumstances have changed considerably since the reconciliation of interests was brought into being. As far as a mandate or a management contract is deemed to continue under section 115 subsection , the related authority shall also be deemed to continue.
A claim shall be deemed to have been determined if no objection is raised by the insolvency administrator or by an insolvency creditor during the verification meeting, or in the written proceedings or if any objection raised by a party is removed. During the verification meeting the filed claims shall be verified in accordance with their amount and rank. Claims contested by the insolvency administrator, by the debtor or by an insolvency creditor shall be discussed individually. Lower-ranking creditors shall file their claims only if specifically requested by the insolvency court to do so.
If performance of the insolvency plan is to be monitored, this shall be published together with the order terminating the insolvency proceedings. Lower-ranking status of the insolvency creditors and of the creditors mentioned at section 265 shall be taken into account only in insolvency proceedings opened before termination of monitoring. The same shall apply to execution against a third party who, by a written statement submitted to the insolvency court without reserving the beneficium excussionis, has undertaken responsibility together with the debtor for performance of the plan by the latter. The request shall be rejected if the constructive part provides for funds being made available in the event that a party concerned shows to the satisfaction of the court that he will be placed at a disadvantage.
Such default to a considerable extent shall be construed only if the debtor has not paid a mature debt although reminded by the creditor in writing with a period of grace of at least two weeks. If the plan is approved, a copy of the plan or a summary of its essential contents shall be communicated to those insolvency creditors who have filed claims and to creditors entitled to separate satisfaction with reference to its approval. If the share rights or membership rights of those persons with a participating interest in the debtor are included in the plan, they too shall be sent the documents; this shall not apply to shareholders and limited liability shareholders in a partnership limited by shares. Listed companies shall publish a summary of the essential contents of the plan on their website. Any agreement concluded by the insolvency administrator, the debtor or any other person and individual parties providing for an advantage not envisaged under the plan in consideration of such parties' conduct in votes or otherwise with respect to the insolvency proceedings shall be void.
Obligations due to restitution for unjust enrichment of the insolvency estate. Obligors liable jointly and severally and guarantors may file a claim to be acquired by them in the future against the debtor by satisfaction of the creditor only if the creditor does not file his claim. Subsection no. 5 shall not apply to the non-managing partner of a company within the meaning of subsection , first sentence, who holds ten per cent or less of the liable equity capital. The order shall be served individually on the debtor's creditors and obligors and on the debtor himself.
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