StaRUG: Meeting of the parties affected by the plan without court involvement


If the debtor has decided to give the parties affected by the restructuring plan the opportunity to vote on the plan at a meeting, section 20 (1) sentence 2 StaRUG requires the meeting to be convened in writing. The debtor must give at least 14 days’ notice of the meeting. This is to enable parties affected by the plan to arrange travel. If the debtor has decided to allow the parties affected by the plan to attend the meeting electronically, only seven days’ notice is required.

The invitation to the meeting must be accompanied by the complete restructuring plan together with all attachments to the plan. Even if the debtor has decided to allow electronic attendance and therefore only needs to give seven days’ notice of the meeting, the restructuring plan and attachments must still be sent out 14 days before voting on the plan will take place.

Although the debtor has the option of offering electronic attendance, the parties affected by the plan always have the right to attend the meeting in person. This means that the meeting cannot be restricted to electronic attendance only.

The debtor is also required to put in place technical arrangements to allow all parties affected by the plan who attend electronically to follow all essential discussions, contribute in the same way as those attending in person, and communicate with other attendees for the full duration of the meeting. If after the meeting an attendee states that technical transmission difficulties prevented him or her from participating for the full duration of the meeting, the debtor must, pursuant to 63 (3) StaRUG, provide proof that the technical difficulties were not within its sphere of responsibility.

Under section 20 (3) sentence 1 StaRUG, it is the responsibility of the debtor to chair the meeting of the parties affected by the plan. The objective of the meeting is to enable discussion of the restructuring plan presented. The affected parties must be given the opportunity to access information needed to evaluate the plan. In turn, the debtor is obliged to provide that information.

If the parties affected by the plan propose any changes to the plan, the debtor must discuss those proposals individually at the meeting, provided they were received at least one day before the meeting. If proposed amendments to the plan are submitted after this time, the debtor is under no obligation to discuss them. However, given that the plan will be voted on and the buy-in of the affected parties is needed, it is advisable to include these proposals in the discussion too.

Under section 20 (4) StaRUG, voting on a plan which has been amended during the meeting is only possible if the changes affect only individual aspects of the plan. If the changes are more extensive, the debtor must make a new plan offer in accordance with section 17 et seq. StaRUG. Alternatively, it can convene a new voting meeting in accordance with section 20 (1) StaRUG.

Finally, section 20 (5) StaRUG requires the debtor to determine the arrangements for voting. In particular, the debtor can specify how voting is to take place. Section 20 (5) StaRUG merely stipulates that each group of parties affected by the plan must vote separately.

It is important to note that there is no mandatory requirement to convene a meeting of the parties affected by the plan. But if the debtor is expecting one of the parties affected by the plan to demand a discussion meeting pursuant to section 21 (1) StaRUG, it is advisable to proactively arrange a meeting of the parties affected by the plan. The debtor has extensive flexibility to determine how the meeting is to take place.

Dr Annerose Tashiro, Attorney at Law in Germany, Registered Foreign Lawyer (SRA)

More newsletters about StaRUG are available at https://www.schultze-braun.de/newsroom/newsletter/internationales/


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