On 1 January 2011 two amendments to the German Insolvency Code (Insolvenzordnung) will come into effect. They were only recently adopted by the German Bundestag as part of the Act Accompanying the Budget (Haushaltsbegleitgesetz).
The changes relate to:
- taxes payable by the debtor during preliminary insolvency proceedings and
- the possibility to continue insolvency proceedings despite payment of outstanding debts by the debtor.
In consequence, the continuation of the business during preliminary and main insolvency proceedings will become more challenging due to the increased liquidity needs. Another planned amendment that would have privileged German tax authorities by granting them better set-off rights was not implemented by the new law.
[Read More]Posted by Peter Jark and Simon Weber on Thursday 30 Dec 2010