EOS welcomes planned amendment in insolvency law

Hamburg, 22 October 2008 – The international financial services company EOS welcomes the German Federal Government’s plan to modify the term over-indebtedness in relation to insolvency law. In future it will no longer be mandatory for a company to file for insolvency after three weeks of balance-sheet over-indebtedness if its forecast for continued corporate existence is positive. This amendment will benefit companies on the financial market and SMEs in equal measure.

Klaus Engberding, the EOS Board member with responsibility for the Germany business unit, says: ‘This initiative shows a welcome move away from the irrevocability of over-indebtedness and towards pragmatic restructuring endeavours that will strengthen entrepreneurial action.’ Creditors of such overindebted companies will benefit as far as the recovery of their receivables is concerned. A realistic joint debt-relief plan will be beneficial for everyone involved.

Background:
According to Section 19, II, p. 2 of the German Insolvency Code (InsO), over-indebtedness as defined by insolvency law applies when the debtor’s assets no longer cover the existing liabilities. Until now, it has been mandatory to file for insolvency within three weeks of this arithmetical insolvency arising – even if a company would be able to resume its payments in the medium term, for example thanks to full order books. It is therefore intended to modify the term over-indebtedness in such a way that a temporary deficiency in coverage in the balance sheet does not lead to the company’s immediate insolvency. This, particularly in times of crisis, will smooth companies’ path towards survival and restructuring.

The EOS Group
With around 3,500 employees in 20 countries, the EOS Group, a member of the Otto Group, is one of the leading financial services corporations in Europe. The 38 operating companies in the group are active in the information management, arrears management and receivables management segments and look after some 20,000 clients around the world – from banks and insurance companies, through manufacturing industry and the mail order segment, to public utilities, telecommunications firms and IT companies.
More information: www.eos-solutions.com

EOS contact: Lara Flemming, Corporate Communications, Tel.: +49 40 2850-1560, E-mail: l.flemming@eos-solutions.com