A. Introduction to the corporate rehabilitation proceedings
Chapter 11of the United States (US) Bankruptcy Code of 1978 1 is entitled ''Reorganisation'' . It governs the rehabilitation of a debtor and the restructuring of its debt obligations. 2 The ยขrst section of the German Insolvency Code states the objectives of the German insolvency law. Its purpose is to jointly satisfy the creditors. Hence a single glance at the titles of both procedures is suโcient to establish that the basic aims of both codes are laid out diยกerently.Whereas the American system centres on freeing the debtor of his debts, 3 the German code focuses on the satisfaction of the creditor. 4 In the US, a debtor sees the bankruptcy procedure as an opportunity. In Germany, to the contrary, bankruptcy traditionally meant the economic death of the debtor. A German entrepreneur would have been prepared to eยกect a composition, but rarely to ยขle for bankruptcy. 5 However, with its new Insolvency Code, which came into force on 1 January 1999, Germany set great store by the newly introduced means of reorganisation, a codiยขed reorganisation plan (''Insolvenzplan''), which was set up using the Chapter 11 BC plan of reorganisation as a model.
After nearly four years'experience with the new German insolvency legislation, not many insolvency plans have been ยขled. According to statistics, approximately 25 000 corporate entities have ยขled for insolvency since 1999 and only 64 of these cases have ยขled for an insolvency plan. 6 Whether this should be interpreted as a sign that the plan procedure cannot fulยขl expectations or that the German debtors, creditors and trustees need more time to get accustomed to this new means is still to be seen.