No Contract Termination under StaRUG
A week ago, the Bundestag passed the StaRUG, among other laws. In view of the expected covid-related wave of crisis cases, it is to come into force on Jan. 1, 2021.
Companies in pre-insolvency restructuring will not, however, be able to release themselves from, for example, leases and other contracts, as was envisaged in the government draft. There was never a majority for intervention in employee rights; with contract termination, the most powerful instrument for operational restructuring that had made it into the draft was removed.
The pandemic has exposed weaknesses in many companies that have existed for a long time and that can only be dealt with through operational restructuring. Managing this without insolvency remains difficult: the StaRUG brings measured progress instead of maximized opportunities for economic renewal. For this renewal, entrepreneurs will have to depend on themselves, their staff and their advisors.
Dietmar
Lucilius Interim
Financial Leadership - Restructuring - Finance Upgrade & Transformation
Photo Credits: Pau Casals @ Unsplash.com
