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Insolvency offences

For any defence against accusations of insolvency crimes, knowledge of insolvency law and civil law is indispensable in addition to expertise in criminal law. Equally indispensable for the development of an optimal defence strategy, however, are business know-how and an understanding of economic interrelationships. ECKSTEIN & KOLLEGEN meets these requirements and can therefore ensure a professional defence.

The legal representatives of a company are regularly the focus of the investigating authorities. In practice, this applies in particular to the directors of limited (GmbH) companies. Furthermore, if a company has no directors, the shareholders may also be obliged to file for insolvency if a reason for insolvency exists. In many cases, allegations of withholding and embezzlement of wages and salaries and wage tax evasion also occur as typical accompanying offences of corporate crises alongside insolvency delay.

The legal regulation of insolvency delay is only seemingly clear and in practice regularly leads to difficult legal and practical problems. Insolvency is deemed to have been delayed at the latest if the period of three weeks between the date of filing the petition and the date of occurrence of insolvency or over-indebtedness is exceeded. A debtor is insolvent if they cannot meet the payment obligations due. Over-indebtedness exists when the debtor’s assets no longer cover the existing liabilities. In fact, the two insolvency grounds of “insolvency” and “over-indebtedness” are extremely finely differentiated by case law and legislative activity. They can therefore only be mastered by specialists. It is precisely at this point that there are often good defence approaches in practice, because the point in time at which a reason for insolvency arises is decisive for the commencement of the insolvency application period, and seemingly late applications can prove to still be in time if they are carefully examined from a legal point of view.

In many cases, there is a tendency to set aside legal concerns regarding the existence of a reason for insolvency in the interest of the de facto continuation of the company. However, such an approach can prove to be a mistake in the event that such rescue efforts fail, as all insolvency files are submitted to the public prosecutor’s office by the competent district courts without exception for examination of a possible delay in insolvency. The risk of detection is therefore high.

In a corporate crisis, it is therefore strongly advised to also involve a criminal law advisor in the reorganization efforts in order to avoid further criminal law implications in the event of their failure. Members of the consulting professions, such as tax consultants and auditors in particular need to be aware of the associated risk of a subsequent allegation of state aid when acting as restructuring consultants.