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ARTICLE · 07 MAY 2026

Knowledge Nugget - Recognizing Insolvency – Key Warning Signs And Recommendations For Managing Directors

Mayer Brown
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Managing directors of German companies face strict personal liability if they fail to recognize and act upon insolvency warning signs. This analysis examines the legal framework under German insolvency law, identifies critical operational and financial indicators that signal impending illiquidity or over-indebtedness, and provides actionable recommendations for compliance with mandatory filing obligations.

GermanyInsolvency/Bankruptcy/Re-Structuring
Marco Wilhelm
Marco Wilhelm
Malte Richter
Malte Richter
Tina Hoffmann
Tina Hoffmann
Stefanie Skoruppa
Stefanie Skoruppa
Inga Rupp
Inga Rupp
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I. WHY THIS TOPIC IS IMPORTANT

Timely recognition of impending or actual insolvency is critical for managing directors. Under Section 15a of the German Insolvency Code (Insolvenzordnung, InsO), executive body members of a legal entity—or of a partnership without legal personality where no personally liable partner is a natural person—must file for insolvency proceedings when the company becomes illiquid (zahlungsunfähig) or overindebted (überschuldet). The statutory deadlines are strict: the filing must be made without undue delay but no later than three weeks after the onset of illiquidity (Zahlungsunfähigkeit) or six weeks after the onset of over-indebtedness (Überschuldung). Importantly, this obligation applies to each managing director individually, regardless of (i) actual knowledge of insolvency grounds, (ii) internal allocation of duties, or (iii) the scope of representation authority. Failure to comply exposes managing directors to personal civil

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© Copyright 2026. The Mayer Brown Practices. All rights reserved.

This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

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