Germany to waive insolvency filing requirement for flood-affected firms
The repeal of the insolvency filing requirement would apply retroactively from July 10 until the end of October 2021. It still needs final approval by the federal parliament, according to the BMJV.
German companies affected by last month's catastrophic floods would not have to file for insolvency until the end of October, the Federal Ministry of Justice and Consumer Protection (BMJV) announced on Wednesday.
In July, flash floods caused by intense rainfall swept away roads, highways and even entire houses, with at least 180 people killed in the hardest hit federal states of North Rhine-Westphalia and Rhineland-Palatinate alone.
Even companies with "viable and successful business models have found themselves in financial distress," said Minister of Justice Christine Lambrecht. Removing the filing requirement would buy companies time to take advantage of economic aid
The repeal of the insolvency filing requirement would apply retroactively from July 10 until the end of October 2021. It still needs final approval by the federal parliament, according to the BMJV.
The waiver should apply only "as long as the requesting parties are engaged in serious financing or reorganization negotiations and there is a reasonable prospect of reorganization as a result," the ministry noted.
On July 21, Germany decided to provide at least 400 million euros (around 473 million U.S. dollars) in emergency aid for private individuals affected by the flood. (1 euro = 1.18 U.S. dollars) .
Photo taken on July 16, 2021 shows roads and houses damaged in flood in Schuld, a town in Ahrweiler, Germany.
