Since 01.01.2021, the StaRUG is in force, now there are changes.
The StaRUG is a law that was brought through the legislature within a few months. It contains not only adjustments for preventive reorganization, but at the same time for the insolvency law, the GmbH law, as well as civil law and criminal law changes.
Paragraphs were eliminated, modified and supplemented. Due to the high speed of the adoption of the StaRUG, the special regulations of the Corona Exemptions are also added. All this makes the StaRUG a complex network of laws for the entrepreneur, so that he can hardly keep track of the options for action, the obligations and the consequences.
At present, entire armies of lawyers, insolvency administrators, auditors and tax consultants are busy working through the jungle of changed laws and developing appropriate measures and behavioral options.
Managing directors must now make immediate adjustments to avoid liability.
One of the most important rules is the so-called paradigm shift for companies heading for a crisis. If a crisis is recognizable, the management must focus on the interests of the creditors and the interests of the company must take a back seat as far as it goes against the interests of the creditors.
In practical terms, this means preserving the value of the company versus maximizing profits, because ultimately the creditor will be satisfied from the remaining insolvency estate if insolvency occurs. The sticking point here is the statement of the recognizability of a crisis.
Since the StaRUG, management is required to establish early detection systems (key figures, liquidity planning, etc.) for a period of 24 months in advance. This is to be updated regularly. It is therefore assumed that the management must be able to predict within a period of 2 years whether or not the company will enter a crisis. This alone is a requirement that is almost impossible to meet, especially for SMEs.
How can the management avoid liability due to insolvency delay?
To this end, there are seven rules that must be implemented:
- Establish awareness that, as of late, the welfare of creditors is paramount for companies in crisis.
- Ensure transparent and clean accounting that is up-to-date on a daily basis.
- Introduce integrated corporate planning over 24 months, which of course includes the corresponding liquidity planning.
- Ensure that all details of expected revenues and expenses, are documented in detail, especially why one has made these assumptions at this level.
- Reviewing and supplementing planning figures on a monthly basis and documenting any changes.
- Introduce metrics to identify changes and areas for improvement.
- Reviewing the strategies and competitiveness of the company.
Of course, these rules cannot always prevent a crisis or even insolvency, because all too often external factors play a decisive role (technological developments, changes in the market, etc.), but they allow the company to react early, to avert a crisis and, if insolvency does occur, to be protected against liability claims.
F&P AG has specialized in particular in pre-insolvency measures and not only advises companies on these topics, but also supports the companies with the implementation of these systems. In doing so, we focus on the entrepreneurial view of the situation. We identify the short-term measures to stabilize the financial situation, create room for efficient restructuring measures, sustainability and ongoing entrepreneurial success. We are not only experts in legal requirements such as the StaRUG, but also implement them in an entrepreneurial way.
Learn more about our restructuring & reorganization experts here.