The number of corporate insolvencies in Germany is historically low.

Compared to 2009, it was most recently almost two thirds lower.

Observers have been expecting a significant increase for several years, but this is a long time coming.

In the industry, the question "Have you already seen the wave?" has now become a kind of mocking greeting, says Rolf-Dieter Mönning, himself an insolvency administrator and professor emeritus for corporate law at the Aachen University of Applied Sciences.

"There are fewer substantial procedures, even restructuring procedures under the new StaRUG, whether by means of a restructuring plan or restructuring moderation, play no role," says Mönning.

Martin Hock

Editor in Business.

  • Follow I follow

Last but not least, one of the most frequently cited reasons is the corona measures.

First of all, this includes the Scholz bazooka.

“Some people in the catering industry say behind closed doors that the Corona aid has brought the best year ever.

On the one hand there was support, on the other hand deliveries were black.” Of course, this does not apply to every company, but it is also the downside of a “bazooka”, which is always extremely inaccurate.

And in order not to aggravate the politically sensitive situation, one has certainly not looked too closely up to now.

But that's probably just the more short-term aspect.

Because the insolvency figures have not only been falling since 2020. Mönning sees two main factors for the downward trend.

One of them is definitely positive.

"For 20 years we have been preaching that entrepreneurs should file for bankruptcy early," he says: "But it's only the under-50 generation that really takes this to heart.

She thinks much more avoiding liability than the previous type of advice-resistant company patriarch.

They come for advice much earlier, so that countermeasures can be taken out of court at an early stage.”

The fact that this is sorely needed is the second long-term aspect of the falling insolvency figures.

German insolvency law has now become completely confusing, says Mönning: "Regular procedures, self-administration, protective shield procedures, StaRUG, and that in various varieties.

As entrepreneurs, you are hopelessly screwed.

When someone comes to me and I try to explain options to them, they often have the feeling that they are getting a legal privacy and not a practical recommendation for action that they actually need.”

Counterproductive “reverse thrusts”

And what Mönning does not want to deny is the stigma that still attaches to bankruptcy in Germany. In earlier times, German bankruptcy law was a liquidation law, in addition to which there was only sequestration as a form of reorganization, which was not regulated by law. This only began to change at the turn of the millennium. But Mönning would have liked the result to be different: “The insolvency code contains more than 350 regulations. Without the accompanying laws. Detail perfectionism! That's typically German. You try to regulate everything, not least because there is a real phobia of abuse. But filing for bankruptcy is always a problem for an entrepreneur, so abuse is really not the main focus.”

Above all, the constant "reverse thrusts" are counterproductive, says Mönning: "First the ESUG facilitates access for self-administration, only to raise the requirements so much later with the 'Insolvency Law Development Act' that it becomes unattractive again." Insolvency law is always fluctuating between debtor and creditor focus.

This is not beneficial.

The distrust of the incomprehensible insolvency law also contributes to the fact that insolvency administrators cannot get rid of their bad image, says Mönning.

The image of the cashier who enriches himself from the misfortune of others persists.

"Insolvency administrators are strictly controlled," says Mönning: "There is almost always an external final invoice.

Rather, insolvency administrators are to be understood as competent companions in a difficult economic situation.” In his book “Crises – Insolvencies up close”, Mönning has attempted to “present the actual core tasks of an insolvency administrator in a fictional way”, as he puts it.

In practice, there is occasionally a lazy insolvency, because there are black sheep everywhere.

As a consequence, this mixture has led to crises being increasingly resolved outside of insolvency law. The large amount of money that is on the market, new sources of financing such as crowdfunding and the lending policy of the banks, which would then rather extend a loan than pay negative interest at the ECB, have created a good environment for this. However, the consequences of the suspension of the insolvency obligation are to be assessed critically, the third of which, due to the flooding, expires on May 1st. The proof of this is very strict. And Mönning does not want to rule out that in two or three years one or the other company will find out that the claim did not exist. These regulations were again very complicated. Mönning thinks it would be much betterto include a general provision for natural disasters in future insolvency law.

For the current year, Mönning expects the shift to more advice and fewer bankruptcy applications to continue.

He does not want to make a forecast of the insolvency figures, "but an increase of 5 percent, as expected by Creditreform, would rather surprise me".