Federal Statistical Office: So far no bankruptcy wave in Germany

According to previous figures, there was no wave of company bankruptcies in the second year of the pandemic. From January through October 2021, local courts reported 11,738 corporate bankruptcies.

According to the Federal Statistical Office on Tuesday, that was 13.5 percent less than in the same period of the previous year. However, experts expect the numbers to rise again this year. Economic concerns in many industries remain high in view of the rampant coronavirus and ongoing restrictions.

In October of last year, according to the Federal Office, the number of bankruptcies was, at 1056, 2.7 percent lower than in October 2020. The level of October 2019, i.e. before the Corona crisis, was undercut even more – by 33.7 Percent, as the Wiesbaden authority announced. The expected claims of the creditors added up to almost one billion euros last October. In October 2020 it was still 2.1 billion euros.

The Association of Insolvency Administrators and Administrators in Germany (VID) explains the comparatively low number of cases with a lively market for corporate takeovers. “We observe that in many cases the restructuring phase no longer occurs. Companies in crisis are often sold or merged beforehand or are taken over by other companies, ”explained VID chairman Christoph Niering. However, industries that were in difficulties before the corona pandemic could hardly benefit from this development.

In order to avert a wave of bankruptcies as a result of the pandemic, the state temporarily suspended the obligation to file for bankruptcy in the event of over-indebtedness or insolvency. Since May 1, 2021, the obligation to file for insolvency has been fully applicable again. Therefore, an increase in bankruptcies was expected. There are exceptions until January 31, 2022 for companies that suffered damage from heavy rain or flooding last summer.

Travel agencies in particular feel at risk

However, the number of companies that are in trouble as a result of the pandemic could increase. According to a survey by the Ifo Institute in December, almost every seventh company (14 percent) sees its existence threatened. “The travel agencies and tour operators still feel particularly at risk with 73.2 percent and companies from the event industry with 67.4 percent,” summarized Klaus Wohlrabe, head of the Ifo surveys. The situation in the hospitality industry also remains critical: According to the survey, more than half of the innkeepers (52.5 percent) see their professional existence at risk.

An increase in the number of insolvencies is also indicated in the preliminary figures from the Wiesbaden Federal Office: The number of standard insolvency proceedings applied for rose by 18 percent from November to December 2021. The month before, it had climbed 43.8 percent. Compared to the same month last year, the number of regular bankruptcies requested was, according to the information, in December 2021 higher by 24.8 percent.

For the full year 2021, the credit agency Creditreform expects a record low of 14,300 company bankruptcies in Germany. For 2022, the credit insurer Euler Hermes had forecast an increase to 16,300 corporate insolvencies in October.

The Leibniz Institute for Economic Research Halle (IWH), which publishes a monthly insolvency trend, uses current data to see a trend towards a little more company bankruptcies, at least in the short term. “After historic lows in the summer, the number of insolvencies of partnerships and corporations rose slightly from October to December 2021,” IWH researcher Steffen Müller said on request. “The IWH does not expect any further increase in corporate insolvencies in the next two months. Against this background, the significant increase in the number of standard insolvency proceedings reported by the Federal Statistical Office means that the number of small insolvencies, for example of solo self-employed persons, has increased, ”explained Müller.