Stückmann Podcast Episode 14: Companies in crisis: recommendations for action
According to Section 1 StaRUG, the managing director is obliged to recognize a crisis at an early stage, for which reliable corporate planning is indispensable in order to recognize an impending liquidity shortfall in good time and to be able to react to it in a targeted manner. Early crisis detection also serves to safeguard the management with regard to the grounds for opening insolvency proceedings in order to avoid liability on the part of the managing director. In episode 14, Prof. Dr. Oliver Middendorf, Alexander Kirchner and Rüdiger Kober talk about resilient corporate planning for reliable early crisis detection.
Important topics:
Is it sufficient for a managing director to wait for an insolvency warning notice from the tax advisor?
The duty of the tax advisor to issue an insolvency warning is a separate duty of the tax advisor that is not congruent with the duties of the managing director under insolvency law. If the tax advisor recognizes a possible reason for opening insolvency proceedings from the actual figures, it is often already too late for the managing director, who should have recognized the reason for opening insolvency proceedings long ago due to his obligation to plan the company, which is derived from the obligation to file for insolvency and is even shifted forward by law due to the obligation to identify risks at an early stage in accordance with Section 1 StaRUG.
Short-term financial planning for the assessment of solvency
The managing director requires short-term financial planning in order to keep an eye on the opening cause of insolvency. The short-term financial plan is a revolving 13-week financial plan that is geared towards the reason for insolvency, for which a 3-week financial plan is required according to BGH case law, which in practice is extended by 10 weeks in order to be able to react in good time to an impending insolvency before the insolvency occurs.
Medium-term financial planning for the assessment of the going concern forecast under insolvency law
The managing director needs a medium-term financial plan in order to keep an eye on the opening reason for over-indebtedness with the forecast of continued existence under insolvency law. Medium-term financial planning is an integrated financial planning calculation that is linked to a budgeted income statement and budgeted balance sheet, which must cover the minimum forecast period under insolvency law of 12 months from the respective assessment date. It is recommended that an integrated financial budget be prepared for the current and subsequent financial year, so that the financial year after next should also be planned by the end of a financial year at the latest.
The burden of proof in insolvency administrator liability proceedings
The burden of proof for a positive forecast of continued existence under insolvency law lies with the managing director in order to be able to exclude the opening reason of over-indebtedness. The preparation of an integrated financial budget therefore serves to relieve the managing director in liability proceedings, where the principle applies:
Not documented = not done.
On the obligation to recognize risks at an early stage
This requires an extension of the integrated financial planning by a further 12 months to the current, the next and the next but one financial/calendar year. In addition, there is the identification and monitoring of risks that could jeopardize the company's continued existence, for which a risk matrix can be helpful, in which risks that could jeopardize the company's continued existence on their own or together with other risks are recorded with the estimated probabilities of occurrence in order to keep an eye on them at all times and to be able to react to them in good time, for which one should think in advance about how to react if the respective risk occurs.
Advice on introducing an early risk detection system
If you do your homework in calm seas, you can concentrate on crisis management in stormy times and no longer need to concern yourself with preparing budgets, as you cannot take targeted action without a reliable planning basis. Without a reliable planning basis, it would be left to chance whether a restructuring is successful.
Corporate groups and group structures:
Consolidated financial plan accounts are not necessarily sufficient for an assessment of the existence of grounds for opening insolvency proceedings. It is a matter of the respective legal entity. In order to be able to recognize an impending liquidity gap at a group company in the minimum forecast period under insolvency law, an integrated financial plan calculation is required at the level of the individual group company. In the event of an imminent liquidity gap that is to be closed at a group company from group funds, a hard letter of comfort in the form of a financial endowment obligation is required according to BGH case law, at least in relation to the reason for opening the insolvency proceedings of over-indebtedness with the positive going concern forecast.
