Through implementing the EU Restructuring Directive, German restructuring and insolvency law will be modernized, more effective, and enriched by new instruments.

On 17 December 2020, the German Bundestag passed the Act on the Further Development of the Restructuring and Insolvency Law (SanInsFoG). The SanInsFoG specifically provides for the implementation of Directive (EU) 2019/1023 on Preventive Restructuring Frameworks (Restructuring Directive) into German law. In addition to the adoption of a Law on the Stabilization and Restructuring Framework for Enterprises (StaRUG), which serves to implement the Restructuring Directive, the Act contains several other reforms of German insolvency and restructuring law. In particular, the Insolvency Code shall be adjusted in those areas where the Federal Government saw need for improvement following the evaluation of the Law to Further Facilitate the Restructuring of Enterprises (ESUG) passed in 2011. As a reaction to the increased infection rate in late autumn, the Law to Mitigate the Consequences of the COVID-19 Pandemic in Civil, Insolvency, and Criminal Procedure Law shall be adjusted again, inter alia, to provide a suspension on the obligation to file for insolvency during January 2021 for companies that expect November and December aid programs. The SanInsFoG shall already become effective in substantial parts on 1 January 2021.