Restructuring plan under the StaRUG

Similar to an Insolvenzplan (the plan creditors vote on in German insolvency proceedings, Sections 217 et seq. of the German Insolvency Code), the restructuring plan under the StaRUG (the German Act on the Stabilisation and Restructuring Framework for Businesses, Sections 2 to 28, 45, 46 and 60 to 72 StaRUG) is a comprehensive reorganisation of the company’s legal relationships, intended to enable the company to be restructured. As a rule, such a plan is drafted by the company’s specialised advisers. Of central importance is the treatment of claims against the company (“debt haircut”) and of rights in assets (for example land) that the business still needs after the restructuring. The plan can also affect shareholders’ rights (for example a debt-equity swap, the exchange of claims for new shares). Employee claims cannot be shaped by a plan. The plan divides the affected creditors into groups according to how they would stand in insolvency proceedings. Within these groups, creditors must in principle be treated equally (although certain groups can be excluded from the outset, for example small creditors or consumers, and appropriate unequal treatment is also possible under certain conditions). The plan is served on the affected creditors in writing. If it is not accepted by all creditors, a vote can be held on it, at the debtor’s request also in court proceedings. In this way, unwilling creditors can be outvoted by an appropriate plan.