Who may initiate proceedings under the StaRUG

Any person capable of being subject to insolvency proceedings, with the exception of natural persons not engaged in business. Proceedings under the StaRUG (the German Act on the Stabilisation and Restructuring Framework for Businesses) can only be initiated for one’s own company, so unlike in insolvency proceedings, it is not possible for a creditor to file a corresponding application against another company.

When can proceedings under the StaRUG be notified or initiated?
Proceedings under the StaRUG can be initiated once the ground for insolvency of imminent illiquidity has occurred. Companies in which the grounds for insolvency of illiquidity or over-indebtedness already exist cannot use the instruments of the StaRUG. For these companies, only a restructuring within insolvency proceedings is possible.

The actual proceedings begin with the preparation of a restructuring plan, which the affected creditors must accept by a qualified majority. This can take place in court proceedings or out of court. If the company wishes to use the court proceedings, it must notify the restructuring project to the competent restructuring court (Section 31 (1) StaRUG). The notification must be accompanied by the draft of a restructuring plan or a concept for the restructuring, an account of the status of negotiations with creditors and an account of the arrangements made to ensure implementation (Sec. 31 (2) StaRUG). Without the need for a court decision, the notification has the effect that the restructuring matter becomes pending and the instruments of the StaRUG can be used for its implementation (Sec. 31 (3) StaRUG).