Coronavirus - Government measures in key jurisdictions - Flipbook - Page 39
Germany
3
4
Insolvency
•
The German government has passed legislation to facilitate access to the short-time
working allowance. Also, the additional income opportunities during short-time work
have been extended. To find out more, see: Coronavirus: FAQ Employment Law Part 3
•
The base period of unemployment pay will be extended by three months for those
whose entitlement ends between 1 May and 31 December 2020.
•
In case the government orders a (regional) quarantine, the employer pays the
regular salary and the regional government will refund the money. After six weeks,
the employees will receive sick pay by the government. To find out more, see:
Coronavirus: FAQ Employment Law Part 1
•
The statutory obligation to file for insolvency within three weeks after a state of
insolvency has been reached has been suspended until 30 September 2020.
Has the
government made •
any changes
to insolvency
legislation?
Contractual
Issues
What measures
have been taken
to reinforce
contracts?
However, this does not apply if the insolvency is not a consequence of the COVID
19 pandemic or if there are no prospects of remedying an existing inability to pay.
If companies were not insolvent on 31 December 2019, it is legally assumed that
insolvency is based on the consequences of the COVID-19 pandemic and that there
are prospects of eliminating an existing insolvency.
•
Companies’ own applications for the opening of insolvency proceedings and
applications by creditors (third-party applications) nevertheless remain possible. In
the case of third-party applications, however, the opening of insolvency proceedings
requires that the reason for insolvency already existed on 1 March 2020.
•
If the obligation to file for insolvency is suspended, companies may continue to make
payments in the ordinary course of business although a state of insolvency is reached.
•
Restructuring in times of Corona - legislator assists with suspending the obligation to
file for insolvency
•
The German government introduced legislation that grants consumers and small
companies the right to refuse performance of a contract (in particular payment) in
order to protect them from financial hardship resulting from the measures taken
to prevent the spread of infections. Small companies are those with less than 10
employees and less than EUR 2 million annual turnover.
•
These measures generally require that it concerns claims from a continuing obligation
established before 8 March 2020 which debtors are not able to fulfil due to the
COVID-19 pandemic or, due to the COVID-19 pandemic, the fulfilment of such claims
would endanger their means of subsistence or the economic basis of their business.
At the same time, the creditor must not be unreasonably affected as a consequence.
•
The provisions do not apply to employment contracts, tenancy agreements and loan
agreements.
Government measures in key jurisdictions
39