Eschborn/Melsungen, 13 April 2022: BRRS partners Jutta Rüdlin and Dr Stephan Schlegel look from the past into the future and assess the insolvency administration situation for 2022.
Their conclusion: Our economy has so far been well equipped for the extensive transformation it is now facing. The insolvency sector has had two extraordinary years due to coronavirus and the measures taken by the German government, so it is extremely difficult to assess future developments.
Is a new era dawning for insolvency administrators as a whole? Where do we stand in terms of insolvencies in the third year of coronavirus?
BRRS partner Jutta Rüdlin: The German government has consistently focussed on avoiding insolvencies during the “hot” coronavirus period, so I am very curious to see what will happen when the short-time working allowance that has allowed many companies to hold out so far expires – in combination with the consequences of the war in Ukraine, the energy transition, rising inflation and other influences, we are definitely facing another critical phase.
Which measures relating to insolvencies and coronavirus will keep us busy for longer?
BRRS partner Dr Stephan Schlegel: The easing of deferrals by the tax office and the health insurance companies harbours massive problems that will catch up with us at some point. As insolvency administrators, we are used to looking at very long periods of time and accompanying developments, which is why we at BRRS Rechtsanwälte have been sceptical from the outset about measures that may bring temporary relief, but which are now coming to an end.
Jutta Rüdlin: The multiple extensions with modifications to the obligation to file for insolvency were not transparent enough and entailed considerable liability risks for managing directors. There can be no permanent bridging, and entire industries have been transformed – there was no support for the necessary transformation processes. Restructuring in insolvency was also excluded from any support. We think that’s a shame because we BRRS insolvency administrators see insolvency as an opportunity – not as a failure that must be avoided at all costs!
What will companies have to prepare for in 2022 – for example, what will happen when the short-time working allowance expires?
Jutta Rüdlin: Increased reclaims in the area of bridging allowances and, in some cases, short-time working allowances will be difficult for companies to cope with. In addition, external applications by tax offices and social security institutions are to be expected again now that the deferrals and standstill agreements granted have expired. The risk of bad debt losses will increase.
Stephan Schlegel: Overall, it is difficult to make reliable forecasts. I see supply chains in particular as a source of unrest for our entire economy. The lack of an effective Covid 19 vaccination in China and the need to stimulate the economy there are also incalculable influences – not to mention the effects of the war in Ukraine.
Is there such a thing as “corona winners” and “corona losers”?
Stephan Schlegel: The financially strong market players are the winners; they have retained staff, reorganised, revitalised and digitalised even more. The smaller companies or those that are not as financially strong are losing their staff, as there is a lot of movement in the market at the moment. Due to the coronavirus pandemic, many people are questioning their current working environment. For insolvency administrators, it is a new phenomenon that we no longer have to fight to save jobs at all costs, but rather try to persuade people to stay
What does the insolvency administration of the future look like?
Jutta Rüdlin: More digital. More coordination-intensive. More reinsurance-orientated. But also: more efficient, less bureaucratic and with BRRS Rechtsanwälte focussing even more on people.