On 01.01.2021, the Act on the Stabilisation and Restructuring Framework for Companies (StaRUG) came into force. For the first time, the Act contains regulations for reorganisation and restructuring measures in the run-up to insolvency proceedings to avoid such insolvency. The core of the StaRUG is the preparation and adoption of a restructuring plan, which can provide for various measures up to and including the adjustment or termination of contracts with business partners. Similar to an insolvency plan, however, the restructuring plan also requires acceptance by the creditors. However, the possibilities of the StaRUG are only available to companies that are already threatened by insolvency.

Overall, the instruments provided for in the StaRUG can be used to carry out restructuring without insolvency proceedings, although a number of measures are similar to those of insolvency proceedings. A disadvantage, though, is that the restructuring plan does not permit any measures concerning the company's employees. Furthermore, the prescribed formalities are quite extensive, which makes the use of the StaRUG measures overall a rather costly matter.

Our restructuring team will be pleased to answer any questions you may have regarding the StaRUG and other reorganisation and restructuring issues.