That corporate insolvencies are not uncommon and are simply part of economic life is clearly demonstrated by thousands of insolvency petitions filed every year in Germany. Notwithstanding this, those affected are often unaware that there is fundamentally a close connection between insolvency and criminal law. Thus, when insolvency proceedings are opened (as well as when they are dismissed for lack of assets), every insolvency file is passed on to the public prosecutor’s office for the purpose of examining possible criminal charges. Consequently, it is not even necessary to file a criminal complaint for the investigating authorities to take action. In the case of an insolvency delay, unpleasant consequences under criminal law are imminent, even if no corresponding intent was shown.
The German law firm Schlun & Elseven offers both private individuals and companies comprehensive legal advice and representation in insolvency criminal law. Our lawyers explain the risks of insolvency and how to effectively avoid the pitfalls of insolvency criminal law. We combine legal expertise with knowledge of business and industry-specific aspects to help you restructure and reorganise your business. In the event of an insolvency delay, our defence aims to dismiss the investigation or, if this is not possible, to obtain an acquittal or the lightest possible sentence for our clients.
Please, do not hesitate to contact us directly to benefit from our expertise.
Insolvency Criminal Law: Legal Advice relating to Potential Offences
As soon as a company gets into financial difficulties, new risks arise, especially for the company’s representatives. These risks can result in insolvency-based criminal activity and other white-collar crimes. Business leaders are often not aware of these risks to the necessary extent. Knowing precisely what the offences consist of plays a critical role in ensuring that the actions of the company representatives do not lead to the commission of insolvency criminal offences.
To provide an idea of how such criminal offences are regulated, here is a list of where one can find the law specific to certain violations. For this list, the InsO is the German Insolvency Statute, whereas the StGB is the German Criminal Code. The list is as follows:
- Deferment of insolvency, § 15a InsO
- Bankruptcy by sidelining, § 283 para. 1 no. 1 StGB
- Bankruptcy through incorrect accounting or booking, § 283 para. 1 no. 5, 7 StGB
- Violation of the obligation to keep records, § 283b StGB
- Privileges of creditors, § 283c StGB
- Benefiting the debtor, § 283d StGB
- Withholding and embezzlement of remuneration, § 266a StGB
- Infidelity, § 266 StGB
- Embezzlement, § 246 StGB
- Fraud, section 263 StGB.
Should there be a suspicion of a criminal offence, the next step is to inform the public prosecutor. The public prosecutor’s office is notified of every insolvency proceeding based on the orders on civil matters notifications. It checks the existence of initial suspicion.
If such suspicion is accepted, a corresponding investigation procedure is initiated. Should there be enough suspicion and evidence to launch a case, the accused can end up in court on charges relating to criminal insolvency law.
At Schlun & Elseven Rechtsanwälte, we are a full-service law firm that advises clients across a wide range of legal fields in Germany. Our insolvency experts work alongside our business criminal defence lawyers when analysing cases. By applying expertise in different legal areas, our team will find solutions tailor-made for our clients and their situation.