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Tuesday, March 28, 2023

Companies: Company bankruptcies have increased again for the first time since the financial crisis

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The district courts registered more than 14,000 corporate insolvencies in Germany last year. Experts do not see a wave of bankruptcies, but expect an increase.

The number of company bankruptcies in Germany rose last year for the first time since the global financial crisis of 2009. The district courts reported 14,590 corporate insolvencies, as reported by the Federal Statistical Office in Wiesbaden. That was 4.3 percent more than in the previous year.

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However, from March 2020 to May 2021, the obligation to file for insolvency was suspended in whole or in part for over-indebted companies. This should prevent a wave of bankruptcies in the corona pandemic. Experts had expected an increase in company failures after these exceptions expired.

However, experts do not see a wave of bankruptcies – even if a further, moderate increase in insolvencies in the current year seems likely due to the difficult economic environment.

The number of bankruptcies has fallen steadily since 2009

According to the Wiesbaden authority, there was an increase during the financial crisis in 2009. Since then, the number of corporate insolvencies has fallen steadily year-on-year.

In February of the current year, the number of company bankruptcies rose after falling at the beginning of the year. According to provisional data from the statisticians, the number of regular insolvencies applied for increased by 10.8 percent compared to the previous month. In January it was down 3.2 percent on the previous month.

According to the information, the proceedings are only included in the statistics after the first decision of the insolvency court. In many cases, the actual time of filing for insolvency is almost three months earlier.

Source: Stern

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