But what does StaRUG actually mean?

The StaRUG, the German Act on the Stabilisation and Restructuring Framework for Businesses (Unternehmensstabilisierungs- und -restrukturierungsgesetz), is a modern tool for companies that have got into a financial crisis but want to avoid insolvency. It offers the opportunity to take restructuring measures at an early stage and thus remain economically stable in the long term.

How does the StaRUG work?

The StaRUG enables companies to draw up a restructuring plan in order to reorganise debts and reach binding agreements with creditors. The key advantage: this takes place outside classic insolvency proceedings, which is less public and protects the company’s reputation. During this phase, the court can prohibit enforcement measures against the company on application (stabilisation order, Section 49 StaRUG).

The advantages of the StaRUG:

• Early stabilisation: companies can take action as early as the stage of imminent illiquidity.
• Protection against creditor action: on application, the court can prohibit enforcement for up to three months (Sec. 53 StaRUG).
• Binding agreements: creditors must abide by the restructuring plan once it has been approved.
• Flexibility: the procedure can be tailored to the needs of the company and is less formal than an insolvency.
• Confidentiality: unlike public insolvency proceedings, the StaRUG remains largely discreet.

A practical example:

A medium-sized trading company specialising in the import and distribution of high-quality building materials faces financial challenges due to increased transport costs and material prices. To avoid imminent payment defaults, management uses the StaRUG to negotiate new payment agreements with creditors. During the process, the company is protected against legal action and gains time to reduce its business costs and open up new sales markets.

Our role:

The Worstbrock-Group supports companies in applying the StaRUG with commercial expertise and together with legal partners. We help you develop a clear restructuring plan that both convinces your creditors and secures your liquidity. Through our experience in negotiating with creditors and our ability to analyse complex economic situations, we ensure that your company not only survives the crisis, but emerges from it stronger.

Summary:

The StaRUG is a decisive instrument for companies that want to act early and avoid insolvency. With the support of the Worstbrock-Group, you can make this process efficient and sustainable, and secure your economic future.