WHOA

Before the WHOA there was already the possibility of reaching a private agreement. In this respect, each creditor has in fact a veto right. If one does not agree, a viable company can still go bankrupt due to a temporary lack of money. During the corona crisis, it has become apparent how problematic this can be, which is why the introduction of the law has been rushed.
A debtor can restructure its over-indebtedness through a private agreement with its creditors and shareholders. Until 1 January 2021, however, this required the consent of all parties involved. An individual could thus block the formation of an agreement, even if the agreement is in the interest of the joint creditors. Viable companies could therefore go bankrupt unnecessarily. The WHOA contains a plan procedure on the basis of which the plan can be imposed – except suspension of payment and bankruptcy – on dissenting creditors and shareholders.

The purpose of the WHOA is to prevent the value that is in the company from being unnecessarily lost in the event of bankruptcy. A WHOA process with a private settlement offers benefits to creditors, employees and other stakeholders, including the shareholders.

1: A responsible restart
2: A controlled business termination.

In both cases, the maximum value for all stakeholders is preserved – and that is the biggest – and best benefit of this new law. The IMK is therefore happy to help entrepreneurs to initiate this WHOA process and bring it to a successful conclusion.