Clifford Chance

German restructuring law reform – draft bill promotes a more efficient restructuring culture

23 September 2020

The draft bill for the implementation of the European Directive on preventive restructuring frameworks (Directive (EU) 2019/1023 of the European Parliament and of the Council of 20 June 2019) has been a hotly anticipated piece of legislation in the German restructuring community for quite some time. However, the wait is now over. The German Ministry of Justice and Consumer Protection recently published its draft bill, which has the potential to open a new chapter for the German market by allowing for the implementation of innovative and efficient pre-insolvency restructuring measures in Germany.

The draft bill for the development of restructuring and insolvency law (Gesetz zur Fortentwicklung des Sanierungs- und Insolvenzrechts - SanInsFoG) includes a new policy for the stabilisation and restructuring of businesses (Unternehmensstabilisierungs- und Restrukturierungsgesetz – StaRUG), which will bring about a new era for pre-insolvency restructurings in Germany by reshaping the fundamentals of the German investment landscape and considerably improving framework conditions for creditors.

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