How do the ESUG and the StaRUG differ in terms of the timing of intervention?
A decisive difference is that the StaRUG (the German Act on the Stabilisation and Restructuring Framework for Businesses) comes into play at an earlier stage of a corporate crisis and can be applied before illiquidity occurs. The instruments of the ESUG (the German act facilitating the restructuring of companies), Eigenverwaltung (debtor-in-possession management under Sections 270 et seq. of the German Insolvency Code) and the Schutzschirmverfahren (protective shield proceedings), are by contrast used in formal insolvency proceedings. They are available as early as the stage of imminent illiquidity, and Eigenverwaltung is also available after illiquidity or over-indebtedness has occurred.
