If a comparison between debtor and creditor does not lead to the hoped-for recovery of the company or if this does not materialize, the only option left is often to dissolve the company through bankruptcy proceedings.
Bankruptcy is a judicial process aimed at dissolving a business in which the assets are forcibly divided among the creditors.
Requirements for bankruptcy
- the debtor's insolvency, ie the inability to pay amounts due and, in the case of legal entities, over-indebtedness
- an application to the local court. This can be provided by the debtor (called “joint debtor” in bankruptcy proceedings) or by the creditors. Legal entities are required to submit an application to the management bodies if they are overindebted
With the help of a commissioned sequester (provisional bankruptcy administrator), the court checks whether the prerequisites for opening bankruptcy are met. It rejects the implementation “for lack of assets” if the existing assets of the debtor are no longer even sufficient to cover the costs of handling the bankruptcy proceedings cover up.
The opening resolution contains:
- Day and hour of opening of bankruptcy
- the appointment of an interim bankruptcy administrator
- an appointment for the first creditors' meeting
- the "open arrest", ie the commandment to all owners of bulk items to report them to the bankruptcy trustee and the prohibition on all owners of bulk items and all debtors of the debtor to provide any services to the debtor
- the date by which all creditors must file their claims with the bankruptcy court
- the date for the second creditors' meeting (examination date)
The opening of bankruptcy is to be published and entered in the commercial register. The opening of bankruptcy means ...
For the debtor:
- he can no longer dispose of his property and powers of attorney granted by him expire
- his right to determine residence is restricted and his honorary posts are suspended
- he has an obligation to provide information to the bankruptcy administrator
- he is entitled to support from his assets (daily allowance)
For the debtor:
- they must report possession of property and rights belonging to the bankruptcy estate to the bankruptcy trustee
- From now on you can only pay to the bankruptcy administrator with a discharging effect (e.g. settle liabilities)
For the creditors:
- Sie verlieren ihr Recht auf foreclosure
- you can register your claims with the court for the "bankruptcy table". This is a list of all of the debtor's liabilities, which is examined by the court. If the registration is not made, the claim is forfeited
Meeting of creditors
The creditors' meeting represents the interests of the creditors vis-à-vis the bankruptcy administrator and the court. In the first meeting, the provisional bankruptcy trustee informs them of the facts and causes of the bankruptcy and decides on the final trustee, a committee of creditors to be set up, the granting of support to the debtor and the closure or continuation of the business.
As a rule, the bankruptcy trustee then continues the business. when there are still enough raw materials and semi-finished parts available that can be processed into finished products. to limit the damage.
From now on, the bankruptcy trustee has all rights of disposal over the debtor's assets. He runs the business under
Preservation of mutual interests. However, its main tasks are to identify, manage, realize and distribute the bankruptcy estate.
As part of the determination of the bankruptcy estate, an inventory is carried out, an inventory and a balance sheet are drawn up (bankruptcy opening balance sheet). The bankruptcy estate includes all assets except for those parts that are in tremendous ownership (e.g. a rented vehicle).
The administration of the bankruptcy estate includes, in particular, the perception and processing of current business, the termination of contracts, the implementation of processes and all actions to return assets that are part of the bankruptcy estate (e.g. bringing up a leased machine).
As part of the realization, the bankruptcy trustee can freely sell all items that have a stock exchange or market price (e.g. according to the price list). The rest will be auctioned.