JUVE Law Firm of the year

Insolvency and Restructuring

Restructuring still a cross-border business

The restructuring specialists found it to be a quiet twelve months. As major insolvency proceedings remained few and far between, there was also a lack of work following on from these cases, in M&A above all. Due to this slump many were left spellbound by the highly coveted Scholz Recycling restructuring, which offered plenty to talk about with its financing through an Austrian bond and the much-debated alternative scheme of arrangement to English law.

Scholz shows: major financial restructuring calls for cross-border teams. The Frankfurt-London connection plays a particularly important role. The European Commission has put pre-insolvency corporate rescue back up for debate: On the one hand, this could raise the appeal of Germany as a legal location in competition with England and give the local corporate rescue advisors more opportunities (indeed, the thwarting of so-called “settlement disrupters” by dispensing with unanimous decisions appears particularly attractive), but on the other hand, it may take the wind out of administrators’ sails even further – these are demanding a strict separation from court-controlled insolvency.

Few insolvencies: liability claims filling the void?

Firms are already practicing a balancing act with their restructuring teams: should they wait out the slump, or make cuts? The latter would mean reduced clout for when the next crisis wave hits. Should they take on less well-paid work and water down the segment’s high profitability? Another “threat” to insolvency-related work is coming from advisor liability. With some well-known administration firms like Brinkmann & Partner, Görg or, above all, hww Hermann Wienberg Wilhelm in the Q-Cells proceedings, taking recourse against previous advisors, this issue could backfire against the entire sector and limit the scope for corporate rescue solutions massively.

Insolvency administrators are not yet taking major steps towards consolidation, despite weak activity. Some big names did manage to widen their regional scope with respectable smaller players: Pluta gained profile in Niedersachsen and Nordrhein-Westfalen with Stefan Meyer’s firm, and Schultze & Braun recruited laterals in Saarland, Hessen and Munich. The counterexample is Mönning & Georg in Aachen: there are two firms here now (dens and Mönning & Partner) carrying on insolvency administration following the split at the end of 2015. The main rising star in the administration scene is based in Halle an der Saale: Flöther & Wissing, with the frequently appointed Prof. Dr. Lucas Flöther, was by all accounts put forward for a trustee role at German Pellets, and a little later continued its success story with the headline-making proceedings for Unister.

 


 

 The following chapter deals with firms specializing in companies in crisis situations, insolvency proceedings and those cases relevant to the market due to their size and complexity, whether it be entirely or with specialist teams. Restructuring is taken to mean predominantly the renegotiating of loans and the refinancing and changing of shareholder or creditor structures ( ?bank lending and acquisition finance, ?private equity), while corporate rescue primarily involves corporate law aspects and even operational problems ( ?corporate). For restructuring issues specific to the banking sector, please see the ?banking and regulatory chapter. For restructuring focusing on employment law, please refer to the ?employment chapter.


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