Insolvency Criminal Law in Germany

Lawyers for German Criminal Law

Insolvency Criminal Law in Germany

Lawyers for German Criminal Law

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.

You are here: Home » Criminal Defence Lawyer in Germany » Insolvency Criminal Law in Germany

Google Rating | Based on 419 reviews

Our Services:

  • Creditor representation

  • Insolvency appeal

  • Insolvency application and proceedings

  • Insolvency Criminal Law | Insolvency Procrastination

  • Managing director liability

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:

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.

Delay in Filing for Insolvency

A delay in filing for insolvency involves delaying or incorrectly filing an insolvency proceedings application. Such delay is punishable under the Insolvency Code (InsO). § 15a InsO stipulates the respective obligation to apply to legal entities and companies without legal personality.

Accordingly, in the event of insolvency or over-indebtedness of the company, a request for the opening of insolvency proceedings must be submitted by the legal entity’s representatives without culpable hesitation, but at the latest three weeks after the occurrence of the insolvency or over-indebtedness.

According to § 15a, Paragraph 4, InsO, anyone who does not make this application, does not make it in time or does not make it correctly is liable to prosecution. As a penalties framework, section 15a (4) InsO provides for imprisonment for up to three years or a fine. If the offender acts negligently, the penalty is imprisonment for up to one year or a fine.

Accordingly, the starting point for criminal liability for intentional or negligent delay in filing for insolvency is the existence of an obligation to file for insolvency due to insolvency or over-indebtedness of the company.

There are various methods for determining insolvency or over-indebtedness. A distinction must be made between business management and economic crime methods. According to the business method, all liabilities due are determined on a specific date, and liquid funds are compared with these, which regularly causes difficulties for law enforcement authorities.

According to the white-collar crime method, which is also admissible in criminal proceedings, all indications are considered, allowing the conclusion that the liquidity situation is critical. Signs include non-payment of due liabilities, non-payment of social security contributions, many reminders and foreclosures, outstanding wage claims, loan terminations, return debit notes, overdraft of credit lines and tax arrears.

The team at S&E will analyse your case closely and provide straightforward guidance regarding how best to proceed considering the facts of the situation facing you.

Defence Services in Insolvency Criminal Cases

Our criminal defence services aim to discontinue the proceedings without an incriminating trial, obtain an acquittal, or the lowest possible sentence if this is not possible.

A successful defence against the allegation of delay in filing for insolvency is often achieved by drawing up a liquidity balance sheet and submitting receipts regarding the due date or lack of conflict of interest of the claims or subsequent agreements on instalments or deferral of payment. This is due to the reasoning that receivables that are not due may not be taken into account in the assessment of insolvency.

A managing d