Can I continue to run my business during the insolvency process?
April 26, 2022 | 40,00 EUR | answered by Helma Beck
Dear lawyer,
I am Ulrike Krause and I recently filed for insolvency. My company, which I have successfully run for many years, is now facing uncertain times. I am wondering if it is possible to continue operating my business during the insolvency proceedings.
The situation is that my company has run into financial difficulties due to various reasons. I have already filed for insolvency to get a clear overview of my financial situation and to find possible solutions. Now I am faced with the question of whether I can continue operating my business despite the insolvency.
My biggest concern is that I do not want to simply give up my life's work. My company is my livelihood and I have many employees who depend on their jobs. It would be very painful for me to have to close the business and jeopardize the jobs of my employees.
Therefore, I am asking you if it is legally possible to continue operating my business during the insolvency proceedings. Are there specific requirements or conditions that I need to consider? What risks are involved and what opportunities exist for me and my company?
Thank you in advance for your help and support with this important question.
Sincerely,
Ulrike Krause
Dear Mrs. Krause,
Thank you for your inquiry regarding the possibility of continuing your company during the insolvency proceedings. It is understandable that you are concerned about how things will proceed for you and your employees. I will try to answer you as comprehensively as possible.
In principle, it is possible to continue a company during insolvency proceedings. This is often referred to as "continuation in insolvency proceedings." However, there are certain conditions and requirements that must be met. Firstly, the insolvency court must approve the continuation. It will be assessed whether the continuation is economically viable and whether the interests of the creditors can be protected.
It is important to note that during the insolvency proceedings, the insolvency administrator takes over responsibility for the company. They will make decisions that are in the interest of the creditors. As a business owner, you can still participate in the business operations to some extent and provide support. It is advisable to work closely with the insolvency administrator and provide all information transparently.
There are risks associated with continuation in insolvency proceedings, for example, the financial situation may deteriorate if the company is not profitable enough. Additionally, you may have to accept restrictions on investments or loans. Therefore, it is important to conduct a thorough analysis of the company's financial situation and set realistic goals.
On the other hand, there are also opportunities that arise from continuation in insolvency proceedings. You have the opportunity to restructure and reorganize your company. You may also be able to find new investors or reach an agreement with the creditors. It is important to seek professional advice to find the best solutions for your company.
In conclusion, I would advise you to consult with your insolvency administrator and a specialized insolvency lawyer. Together, you can develop a strategy to successfully guide your company through insolvency. I wish you success and am available at any time for further questions.
Sincerely,
Helma Beck
