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Insolvency Criminal Law
Insolvency Criminal Law is an important area of Commercial Criminal Law that concerns the criminal consequences of the conduct of managing directors and other responsible persons when a company gets into an economic crisis and becomes insolvent or over-indebted.
Especially in times of Economic Uncertainty, Insolvency Proceedings and the associated Criminal Law risks can pose an existential threat to companies and their managers. Sound legal advice in the run-up to Insolvency Proceedings or in the event of investigations is therefore essential.
A closer look at Criminal Insolvency Law
Criminal Insolvency Law deals with criminal acts in connection with Insolvency. Its aim is to ensure that Insolvency Proceedings are conducted properly and that creditors are treated fairly. The main sanctions are:
- delaying Insolvency Proceedings,
- preparing balance sheets in a way that makes it difficult to obtain an overview of assets and
- discriminating against creditors.
Various criminal offenses regularly occur in connection with Insolvency
Other non-criminal consequences include the withdrawal of professional qualifications or a professional ban. This is particularly the case for managing directors and board members of companies.
Solutions for avoiding Criminal Law consequences in the event of Insolvency
In the vast majority of cases, the main line of defense is likely to be proving that the company is not ready for Insolvency or at least that there was no intent to do so. A careful analysis of the company’s financial and economic situation is essential here.
The best strategy to avoid criminal consequences in the event of Insolvency is prevention: companies and managing directors should seek legal advice at an early stage if they are faced with Insolvency. Professional legal advice can help to identify the legal risks and take appropriate measures. In addition, it is crucial to properly document all financial and economic data to prevent later disputes and clearly present the company’s financial circumstances.
Insolvency criminal law is a complex and sensitive subject area that presents companies and their managers with significant legal challenges in times of financial crisis. Early legal advice and compliance with the legal requirements can help to minimize criminal law risks and find the best possible solution for the company and its creditors.