Insolvency
Criminal Law

Insolvency is a key term in insolvency law and refers to the inability of a debtor to fulfil their due payment obligations. A legal definition of the term ‘insolvency’ can be found in Section 17 (2) of the German Insolvency Code (InsO). According to this, a debtor is insolvent if they are unable to fulfil their payment obligations as they fall due. Insolvency is generally assumed if the debtor has stopped making payments.

In practice, insolvency exists if the debtor is unable to settle at least 90% of its total liabilities due within three weeks. A distinction must be made between a temporary payment delay and permanent insolvency. The latter is relevant under insolvency law and can have consequences under criminal law, particularly if the insolvency application is not filed in good time.

The determination of insolvency requires a careful analysis of the company's financial situation. Various factors must be taken into account, such as the liquidity situation, outstanding receivables and current liabilities. In practice, there are often grey areas that make legal classification difficult. Our expertise lies in precisely assessing these complex issues and developing a sound legal strategy.

The defence against allegations in connection with insolvency often involves the questions of when the insolvency occurred and whether the responsible parties acted in accordance with their duties. We use our in-depth understanding of the legal and economic context to represent your interests in the best possible way and identify potential defence approaches.

Over-indebtedness exists if the debtor's assets no longer cover the existing liabilities. However, this does not apply if it is more likely than not that the company will continue as a going concern (positive going concern forecast).

The determination of over-indebtedness requires a two-stage examination: Firstly, a going concern forecast is prepared, which assesses the company's chances of survival. If this is negative, an over-indebtedness status at liquidation values as at the reporting date is prepared. This valuation is often associated with considerable challenges, as it involves forward-looking assessments and complex valuation issues.

The defence against allegations of over-indebtedness often involves questions of the timing of the occurrence of over-indebtedness, the appropriateness of the going concern prognosis and whether the company management acted in accordance with its duties. We use our in-depth understanding of the legal and business contexts to strengthen your position and develop effective defence strategies.

In the area of criminal insolvency law, companies and their managers can be confronted with a variety of criminal charges.

The most common accusations include delaying insolvency, bankruptcy and favouring creditors. Delaying insolvency relates to the failure to file for insolvency in good time, bankruptcy includes actions aimed at reducing the insolvency estate, and favouring creditors refers to the unlawful preferential treatment of individual creditors.

The investigating authorities have far-reaching powers to investigate such allegations. This includes searching business premises, seizing documents and analysing digital data. The continuous expansion of investigative powers gives law enforcement agencies comprehensive access to relevant information, even if it is specially protected.

In the event of a search or a request for surrender, we are at your side immediately to set the right course for further proceedings. We support you in compiling relevant documents, preparing for questioning and developing an effective defence strategy.

We examine for companies and those responsible what criminal law risks exist in connection with the financial situation and how these can be minimised or excluded. For this purpose, we also prepare detailed legal opinions if required.

We advise companies that are confronted with accusations of delaying insolvency, bankruptcy or favouring creditors. Quick and strategic action is required in such situations. Our highly specialised team works on an interdisciplinary basis and includes aspects of insolvency and corporate law as well as criminal law.

In the event of imminent or actual insolvency, we can provide crisis management support and handle communication with law enforcement authorities, insolvency administrators and creditors. We start with a comprehensive analysis of your legal situation and develop a customised defence strategy based on this.

Our aim is to intervene at an early stage and, if possible, to prevent charges or achieve a dismissal of the proceedings. We use state-of-the-art legal tech tools to work efficiently and precisely. In the aftermath of a crisis situation, we advise on which compliance measures may be useful for the company concerned in order to minimise future risks.

Finally, we support the implementation of technical and organisational measures to improve financial transparency and control. In the event of breaches of insolvency law regulations, we represent the company vis-à-vis the relevant authorities.

• Managing directors, board members

• Self-employed persons and entrepreneurs
• Insolvency administrators
• Companies in financial difficulties

Specialisation and experience

As lawyers and specialist lawyers for criminal law, we also have a particular focus on criminal insolvency law. Our in-depth expertise in this complex area of law ensures that our clients receive targeted and expert advice and defence. Our know-how ranges from general criminal procedural issues to specific insolvency offences such as delay in filing for insolvency, bankruptcy and creditor preferential treatment.

Track record

We have a proven track record in representing clients in complex criminal insolvency proceedings. In numerous cases, our lawyers have brought about decisive turnarounds, obtained dismissals of proceedings or achieved significant sentence reductions. These successes underline our position as one of the leading providers in this field.

Interdisciplinary approach

Our interdisciplinary approach enables us to take a holistic view of your situation. We understand not only the criminal law aspects, but also the economic and emotional challenges you are facing. This comprehensive approach allows us to develop tailor-made and innovative defence strategies.

Personal commitment

Every case is unique to us, and our personal commitment reflects this. We take the time to understand your individual situation and provide you with the support you need. We are committed to supporting our clients, carrying out thorough analyses and developing individual solutions.

Trusted partners

The trust of our clients is important to us. As trustworthy partners, we ensure that every step in the process is communicated transparently and comprehensibly. Our clients particularly appreciate our ability to explain complex legal issues in an understandable way and to guide them through the entire process.

When should I contact a criminal insolvency lawyer?

As soon as you notice financial difficulties in your company or recognise the first signs of possible insolvency, it is advisable to contact us. The earlier we are involved, the better we can protect your interests and minimise potential criminal law risks.

How much does an initial consultation cost?

The cost of the consultation depends on the scope and complexity of the case. We offer transparent pricing models and inform you in advance of all costs incurred to avoid any surprises.

How long do insolvency criminal proceedings usually take? 

The duration of criminal insolvency proceedings can vary greatly and depends on the complexity of the case. It can last from several months to several years. We make every effort to organise the proceedings as efficiently as possible.

Can I avoid a custodial sentence?

Our primary goal is to avoid a custodial sentence. With our experience and expertise, we are often able to get proceedings dropped or obtain alternative sanctions. The specific options depend on the individual case.

How can I limit my personal liability as a managing director?

As a managing director, you can limit your personal liability by acting carefully and documenting your actions. We can advise you on the necessary steps and help you to make your decisions legally compliant.

What happens if I file for insolvency too late?

Late filing for insolvency can have consequences under criminal law. We support you in meeting the correct deadlines and developing the best possible defence strategy in the event of a delay.

How will criminal insolvency proceedings affect my professional future?

Criminal insolvency proceedings can have an impact on your professional future. Our aim is to minimise these consequences and protect your reputation.

Can I continue to run my business during the proceedings?

This depends on the circumstances of the individual case. We will advise you on the legal options and support you in continuing your business activities as far as possible.

How do you deal with media attention in high-profile cases?

We have experience in dealing with high-profile cases and are committed to protecting your privacy. If necessary, we work with communications experts to develop an appropriate media strategy.

How does your law firm differ from others in the field of criminal insolvency law?

Our firm is characterised by a combination of in-depth legal expertise, years of experience and a holistic, client-centric approach. We utilise state-of-the-art technology and innovative strategies to achieve the best possible results for our clients.