Criminal Law Relating to Insolvency Proceedings

The insolvency of a business is a defeat for executives on more than just a commercial level. Afterward, managers who fought to keep their businesses alive to the last often face criminal prosecution.

Working from hindsight, regulators often move too quickly to the accusation of illegal delays in filing for bankruptcy (§ 15a of the Insolvency Statute). In many cases, this charge is accompanied by allegations that the firm failed to prepare annual reports, violated accounting duties or withheld social security contributions (§ 266a Penal Code). A conviction can result in more than just painful punishments. In many cases, the bankruptcy trustee and benefits providers may file claims for back payment. Executives may also face years-long bans on holding leading positions at other firms.

To ensure that the crisis of a business does not lead to a crisis of criminal liability, we advise our clients on preventive measures. If regulators begin investigating an insolvency-related offense, we defend them vigorously and with a sense for the business aspects of each case.