Following the Bundestag on 25.03.2020, the Bundesrat also adopted thefederal government'scorona package of measures of 23.03.2020 in two special sessions, first on 25.03.2020 and then on 27.03.2020, to counter the consequences of the ongoing COVID-19 pandemic.The legislator wants to cushion the considerable impact of the COVID-19 pandemic on economic practice with a bundle of - temporary - measures and laws.
Not least because the changes also offer opportunities in these difficult times, we would like to outline the main changes - albeit without any claim to completeness, but at least as an overview - before they come into force:
Insolvency law
The obligation to file for insolvency in accordance with Section 15a InsO is suspended until September 30, 2020, unless the insolvency maturity is not due to the consequences of the COVID-19 pandemic or there is no prospect of eliminating an insolvency that has already occurred. In the event of insolvency that had not yet occurred on December 31, 2019, a special presumption is provided for the pandemic-related occurrence of insolvency maturity.
Insofar as the suspension applies, the new statutory provisions also provide for a number of consequential adjustments in the area of managing director and board member liability, insolvency avoidance and the restitution and collateralization of loans, including as far as shareholder loans and equivalent legal acts are concerned.
A reason for insolvency that occurred before March 1, 2020 is required for creditor applications.
In addition, an extension of the amended legal situation is possible until March 31, 2021.
Corporate law
In order to enable affected companies to remain capable of acting despite sovereign restrictions on meetings, the legal requirements for holding general meetings and shareholders' meetings and passing shareholder resolutions will be simplified in 2020 for public limited companies, limited liability companies and cooperatives, among others.
This makes it possible for
- the management board of an AG, KGaA or SE can decide, with the approval of the supervisory board, even without authorization in the articles of association, that
- shareholders to cast their votes by means of electronic communication,
- members of the Supervisory Board participate by means of audio and video transmission,
- votes are cast by postal vote or
- the Annual General Meeting is held without the physical presence of shareholders,
- the Annual General Meeting is convened with a shorter notice period of up to 21 days and is held during the entire financial year,
- shareholder resolutions of a GmbH are passed in text or written form even without the consent of all shareholders,
- resolutions of the members of cooperatives can also be passed in writing.
All of these simplifications initially only apply to such measures and transactions in 2020.
Economic support measures
In addition to the "Corona emergency aid for micro-enterprises and solo self-employed persons" by the Federal Ministry of Economics and Transport and the Federal Ministry of Finance, an economic stabilization fund is being created to stabilize companies of a certain minimum size. Companies that meet at least 2 out of 3 of the following criteria can apply for the stabilization measures:
- Balance sheet total more than € 43 million;
- Annual turnover of more than €50 million;
- more than 249 employees on an annual average.
The new economic stabilization fund is authorized
- to assume guarantees of up to €400 billion to eliminate liquidity bottlenecks for companies and to support its own refinancing on the capital market,
- to take out loans of up to €100 billion to recapitalize companies, including the acquisition of shares in companies and the acquisition of other equity components, and
- to grant loans of up to € 100 billion to refinance the special tasks assigned by the Kreditanstalt für Wiederaufbau (KfW).
Stabilization measures by the fund are possible until 31.12.2021. The stabilization measures to be carried out by the fund are decided upon application by theFederal Ministry of Financein agreement with the Federal Ministry for Economic Affairs and Energy.
In addition to its existing programs, the Kreditanstalt für Wiederaufbau (KfW, http://www.kfw.de) also has a special program 2020 with basically unlimited funds, which consists of various programs depending on the age and size of the companies concerned. Applications can only be submitted via the house bank.
Tenancy law
Due to the economic consequences of the COVID-19 pandemic, it is to be feared that tenants of properties and rooms rented for private or commercial purposes may not be financially able to pay the rent (on time). In order to protect tenants from the legal consequences that may arise from non-payment of rent, landlords are prohibited from terminating rental agreements for a limited period of time for payment arrears relating to the rental periods from 01.04.2020 to 30.06.2020 if the non-payment is due to the effects of the COVID-19 pandemic.
General contract law
Consumers can refuse to fulfill their performance obligations under continuing obligations until 30.06.2020 if this would otherwise endanger their reasonable livelihood. This affects so-called material continuing obligations, i.e. contractual relationships that relate to the provision of services of general interest (e.g. telecommunications and energy supply).
Under certain conditions, this also applies to micro-enterprises and small and medium-sized enterprises with regard to continuing obligations that are necessary to cover services for the appropriate continuation of the business.
Payment obligations for consumer loan agreements that fall due between April 1, 2020 and June 30, 2020 can be deferred for a period of three months, excluding any right of termination resulting from this, if the consumer cannot reasonably be expected to make the payment due to the loss of income caused by the pandemic.
You can also find an overview of the adopted laws on measures in full text(draft laws with the status of their introduction into the Bundestag on 25.03.2020 and with references to the publication of the adopted laws in the Federal Law Gazette (Federal Law Gazette I No. 14 of 27.03.2020, www.bgbl.de)here in our blog.
We will continue to monitor and evaluate the current and any further planned amendments for you. Your usual contacts are available at any time by telephone or email for a more in-depth discussion.
BROCK MÜLLER ZIEGENBEIN Attorneys at Law Partnership mbB