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2 years ago

InsO study 2015

  • Text
  • Insolvency
  • Restructuring
  • Proceedings
  • Mckinsey
  • Creditor
  • Esug
  • Creditors
  • Preliminary
  • Respondents
  • Germany

Even post-ESUG there are

Even post-ESUG there are myriad reasons for restructuring under international law – analysis based on individual cases Restructuring should be carried out under foreign law if ... Percent … it is important to rapidly conclude proceedings to ensure the restructuring succeeds 22 … the restructuring can be realized by restructuring the main credit agreement 20 … this contract is subject to foreign law 17 … the main creditors come from an international legal system 16 … the entity in question is a Group/corporation in which more than one company needs to be restructured 14 … the indirect insolvency costs in Germany are expected to be high (e.g., loss of image/revenue) 10 In practice, the limitation to individual groups of creditors was an especially important argument SOURCE: Noerr; McKinsey 16

Respondents identified 4 main disadvantages of German insolvency law compared to other legal systems Are the following characteristics of German insolvency law perceived as disadvantages? Percent Tend to agree Tend to disagree 1 No Group insolvency law 71 29 2 German claw-back law 70 30 3 4 No pre-insolvency restructuring procedure No limitation to specific groups of creditors 54 64 For judges and insolvency administrators, the disadvantages of German insolvency law tend to carry less weight 46 36 "Unfortunately, you still have to file for insolvency in Germany – ESUG has not changed that – even though a pre-insolvency restructuring procedure is long overdue." – Anglo-Saxon distressed investor "It's bad that Germany has no viable Group insolvency law, and sadly the current drafts do not bode well – cooperation is all well and good but is often barely justiciable." – Anglo-Saxon distressed investor SOURCE: Noerr; McKinsey 17

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