New Options For Creditors In German Insolvency Proceedings

German Parliament passes "Act for the Further Facilitation of the Restructuring of Companies" (Gesetz zur weiteren Erleichterung der Sanierung von Unternehmen, ESUG)

On 27 October 2011, the German Parliament (Bundestag) finally passed the "Act for the Further Facilitation of the Restructuring of Companies" (Gesetz zur weiteren Erleichterung der Sanierung von Unternehmen, ESUG, BT-Drs: 17/7511) (ESUG). The Federal Council of Germany (Bundesrat) will vote on ESUG in late November or early December 2011. The aim of this substantial insolvency reform is to make German insolvency law more competitive. In the past, it has been routine for creditors to consider and, in some cases implement, a shift of the debtor company's center of main interest (the so called COMI) abroad in order to benefit from foreign insolvency legislation. In order to supersede this type of forum shopping, the German legislator has significantly improved the influence of creditors in insolvency