The Term Of Insolvency And Its Variation In The Bankruptcy Law Of Germany

The eruption of a severe financial crisis since 2008 caused series problems around the world market. In order to stabilize their domestic financial markets, the German legislature promulgates several laws and regulations as a quick "lighting action". Meanwhile the "modified double insolvency" concept also has been reintroduced into the German bankruptcy law of Article 19, paragraph 2.The insolvency mechanismwhich regulated by Article 19 of German bankruptcy law and its theoretical significance as well as the practical function have been long time immersed in discussion.On January 1,1999, on the basis of previous to take effect on October 18,2008 in the second paragraph of article 19 of the bankruptcy law version, the important measure of the debtor balance sheets, lies in the comprehensive when economic environment and the factors of enterprise is obvious may continue to operate.Namely, continuing operations possibility prediction depends on the result of the valuation for the debtor’s property, and this was put in the enterprise should last for business forecast under consideration, or in enterprise liquidation procedures.This version concept is called "the original double insolvency" concept; According to the second paragraph of article 19 version in the law of October 18,2008, continuing operation no longer depends on the enterprise valuation predictions, on the contrary, if at the beginning,the forecast of the enterprise’s capability reflects positive results, in accordance with the relevant provisions this enterprise then can be ruled out of the insolvency state. Such insolvency concept is called a "modified double insolvency" concept by the academics.The intention of the this corresponding measures to correct the concept of insolvency concept is very clear-the legislature are worried about the financial crisis, fear that it would lead to the sharply sinking of the equity and real estate value, causing scale bankruptcy of enterprises.To reverse this possible destructive crisis, the organ of legislaturein this state reintroduced the "modified double insolvency" concept.Thanks to strong power of the national measures, and the joint efforts of all civilizations, Germany’s economy in 2011 and 2012 recovered soon.On November 9, 2012, the German parliament announced that the lift for the provisions of the current insolvency concept is valid.In fact, according to the previous legislation, modified double insolvency concept only valid for two years, but the legislators yet extend the validity period until December 31,2013.According to the latest resolution, modified double insolvency concept and its validationwould last ever in the bankruptcy law and continuous to have its practical affection.On the one hand, the temporary reintroduction of the "modified double insolvent "concept,whether has positive significanceto resist the financial crisis remain to be discussed and clarified; on the other hand, continue to apply this moderate "modified double insolvency" conceptafter the economy picks up, whether suitable for construction of a good enterprise market environment is also having doubts.In this article, the variation process of the insolvency mechanismin German bankruptcy law and its constituent elementswill be firstly analyzed in detail. And then combined with Germany’s economic background and future development trends, the above mentioned doubts and questionswill be preliminary explained and answered. Lately the article willprovide some legislative evaluation to this controversial insolvency mechanism.