Historically, German insolvencies have been perceived as extremely unattractive, particularly because they were dominated by court-appointed bankruptcy administrators, with limited to no influence for creditors, The National Law Review reported yesterday. However, this has significantly changed over the last years. In that respect, it was the clearly expressed intention of the German legislature to make insolvencies more attractive for all parties involved. However, the available powerful features are often still unknown and hence not used, in particular by foreign investors. There are a few key features that may be utilized in German insolvencies that allow strategic investors to straighten out a venture that has proven to be more tricky than anticipated. They can be used by financial investors as an M&A tool for investments in companies that can be bought for a low price and then turned around. However, a key element for success is a coordinated and structured approach as early as possible in the process.
