BGH Rules for the First Time in a StaRUG Case and Specifies the Burden of Presentation for Continuation of StaRUG Proceedings Despite Insolvency Maturity

With its decision of 23 April 2026, published last week, the BGH (Federal Court of Justice) had – as far as published – for the first time the opportunity to address the provisions of the Corporate Stabilisation and Restructuring Act (Unternehmensstabilisierungs- und -restrukturierungsgesetz, StaRUG), which entered into force in essential parts on 1 January 2021, which is currently subject to an evaluation at EU level, and in respect of which two constitutional complaints regarding the question of uncompensated interference with the rights of existing shareholders are pending (1 BvR 502/25 – EMAG and 1 BvR 606/25 – Varta).

In this decision, the BGH established important guidelines for the first time regarding the termination of a restructuring case following notification of insolvency maturity. The decision concerns the question under which conditions a restructuring court may refrain from terminating the restructuring case despite subsequent notification of inability to pay or over-indebtedness.

The decision deserves particular attention, as the BGH, from the perspective of restructuring practice, has clearly defined the requirements for the debtor’s submissions and at the same time strengthens the court’s discretion in its review.

I. Facts of the Case: Occurrence of Inability to Pay After Notification of the Restructuring Project

The decision was based on the following facts: The debtor – a pure holding company in the legal form of a GmbH (limited liability company), holding interests in two companies over whose assets insolvency proceedings had been opened shortly before – had notified the Local Court (Amtsgericht) – Restructuring Court – Düsseldorf of a restructuring project and submitted a draft restructuring plan. The draft plan provided for the formation of two creditor groups, each of which comprised only one creditor: a bank as “creditor for claims arising from third-party security” and a service provider as “ordinary simple restructuring creditor.” The plan distribution rate for both groups was to be 1%. This was to be financed by a plan contribution of EUR 42,000.00 from a Polish company, which had not yet been secured.

After notification of the restructuring project, the bank called in its claim, whereupon the debtor notified the court of its inability to pay. The Local Court terminated the restructuring case. On immediate appeal, the Regional Court (Landgericht) dismissed the appeal and admitted the appeal on points of law (Rechtsbeschwerde) to the BGH.

II. Default Rule Pursuant to § 33(1) No. 1 StaRUG: Termination of the Restructuring Case

The starting point is the following statutory principle: If the restructuring court becomes aware that the debtor is unable to pay or over-indebted, the restructuring case is, in principle, to be terminated pursuant to § 33(1) No. 1 StaRUG. The StaRUG proceedings are specifically designed to address imminent inability to pay and are not intended to readily replace conventional insolvency proceedings. However, the StaRUG provides for exceptions to this principle in § 33(2).

III. Exception: No Termination, Discretionary Decision of the Court

Pursuant to § 33(2) No. 1, second half-sentence StaRUG, the restructuring court may refrain from termination in particular where the opening of insolvency proceedings, in view of the stage of restructuring already reached, is manifestly not in the interest of the creditors as a whole.

The restructuring court may also refrain from termination pursuant to § 33(2) No. 1, third half-sentence, where the insolvency maturity is based on the acceleration of a claim which, according to the notified restructuring concept, is to be subject to modification by the plan, provided that the achievement of the restructuring objective is more likely than not.

In its most recent decision, the BGH now clarifies that the restructuring court has discretion in making its decision. The continuation of the restructuring case is thus not an automatic consequence of a better creditor satisfaction claimed by the debtor in a StaRUG scenario. Rather, the court may and must assess the factual uncertainties of the restructuring. This applies in particular to alleged differences in distribution rates between insolvency and restructuring scenarios. If the projected distribution rates are subject to significant uncertainties, the restructuring court may take these uncertainties into account in its decision.

IV. The Debtor Bears the Burden of Presentation and Proof

In the BGH’s view, the debtor (consequently) bears the burden of presentation and proof for the circumstances that would justify refraining from termination.

If the debtor relies on the exception to the statutory default rule, the debtor must substantiate why the continuation of the StaRUG proceedings is justified despite the occurrence of insolvency maturity. What is required are reliable and comprehensible information regarding the status of the restructuring, the expected distribution rates, the financing and liquidity planning, as well as the feasibility of the restructuring concept. Mere assumptions, optimistic plan calculations, or general references to an alleged added value of the StaRUG proceedings will regularly not satisfy the requirements.

The debtor’s burden of presentation becomes particularly evident in restructuring concepts whose success depends on third-party contributions. In its decision, the BGH holds that the achievement of the restructuring objective is not more likely than not if the success of the restructuring depends on a voluntary payment by a third party that has not been sufficiently secured. In practice, this particularly concerns investor contributions, shareholder subsidies, or other financing commitments that are not legally and economically reliably secured. Non-binding letters of intent or mere expressions of support will therefore regularly not suffice to justify the continuation of the restructuring case.

V. The Debtor’s Legal Interest in an Appeal Despite Termination of the Restructuring Case

In addition, the decision contains an important procedural clarification. The debtor’s legal interest in an appeal against the termination of the restructuring case does not lapse merely because the notification of the restructuring case loses its effect upon termination or because more than six months have passed since receipt of the notification. The BGH thereby ensures that termination decisions of the restructuring court remain subject to effective review by way of appeal.

VI. Implications for Practice

The BGH’s decision makes clear that the requirements for the preparation and management of StaRUG proceedings should not be underestimated. Debtors should already be in a position at the time of notifying the restructuring court of the project to react immediately to any insolvency maturity that may subsequently occur and to make substantiated submissions regarding the conditions for refraining from terminating the restructuring case. This includes in particular the availability of a reliable comparative calculation of the next-best alternative scenario, comprehensible distribution rate projections, appropriate group formation, a documented status of negotiations with the affected creditors, as well as binding and fully funded commitments from any third-party contributors.

Overall, the BGH confirms the exceptional nature of the continuation of a restructuring case despite the occurrence of mandatory grounds for insolvency. The StaRUG remains a preventive restructuring instrument and not a substitute for insolvency proceedings once insolvency maturity has occurred. At the same time, room remains for cases in which continuation is exceptionally in the interest of the creditors as a whole, even where insolvency maturity occurs subsequently. From the debtor’s perspective, the decisive factor for utilising the exception is careful and early preparation in order to be able to make substantiated submissions regarding the prospects of success of the restructuring even after the occurrence of insolvency maturity.