StaRUG Case Law: What the Courts Have Decided

The state of StaRUG case law

StaRUG case law has grown slowly since the Corporate Stabilisation and Restructuring Act came into force on 1 January 2021. Most restructuring matters are handled by specialised local courts acting as restructuring courts, and many proceedings end without a published decision because plans are agreed or the debtor withdraws its notification. Appeals are restricted, so few cases reach higher courts.

Nevertheless, a body of StaRUG case law now exists, including a decision of the Federal Constitutional Court on the protection of shareholders and a decision of the Federal Court of Justice (BGH) on the termination of restructuring matters when the debtor becomes illiquid. This page summarises the decisions we have verified against the published texts and draws practical lessons.

Because the restructuring courts are local courts (Amtsgerichte) with jurisdiction concentrated, as a rule, at the local court at the seat of each Higher Regional Court (§ 34(1) StaRUG), subject to state ordinances, decisions on the same issue can differ between courts. Debtors and creditors should therefore check the practice of the competent court and not rely solely on decisions from elsewhere.

Judges' expectations on documentation, timing and the role of the restructuring officer can differ considerably between courts. Early, informal contact with the court office, where permitted, often avoids procedural surprises later in the process.

BVerfG 2025: shareholders crammed down in a listed company

Facts. A listed stock corporation notified a restructuring project to the restructuring court in July 2024, and the court appointed a restructuring officer. The plan provided for a capital reduction to zero and a capital increase excluding the subscription rights of the free-float shareholders, so that only the majority shareholder holding 50.1 per cent and a strategic investor took part, each half.

The free-float shareholders, holding 49.9 per cent in total, left the company without compensation. Six groups voted in favour; the free-float shareholder group rejected the plan. The Stuttgart local court confirmed the plan on 11 December 2024 (6 RES 1243/24), and the Stuttgart regional court rejected the shareholders' appeals as inadmissible on 21 January 2025 (1 T 12/24).

Holding. The Federal Constitutional Court did not accept the constitutional complaint of 19 shareholders for decision, because it did not engage sufficiently with the challenged decisions and the statutory framework (BVerfG, order of 28 February 2025 – 1 BvR 418/25).

The regional court had held that an appeal under § 66(2) no. 3 StaRUG is admissible only if the appellant credibly shows that it would be materially worse off than without the plan and that the disadvantage cannot be compensated from funds set aside in the plan; the appellant must present realistic alternative scenarios and engage at least with the plan's comparative calculation. The complaint did not challenge the StaRUG provisions themselves.

Why it matters. The decision is a non-acceptance order, not a ruling on the merits of shareholder cram-downs. In practice, however, it confirms that the strict admissibility hurdles of § 66(2) StaRUG stand, and that shareholders who object to a plan must substantiate concretely why they would be better off in the alternative scenario. Our insight on cross-class cram-down under the StaRUG explains the underlying rules.

BGH 2026: termination of the restructuring matter after illiquidity

Facts. A holding GmbH whose two subsidiaries had become insolvent notified a restructuring project to the Düsseldorf restructuring court in November 2024. Its draft plan formed two groups: one for a bank's claim of about EUR 610,000 under third-party security and one for a small advisory fee claim. The court terminated the restructuring matter in January 2025 (603 RES 6/24), and the regional court rejected the appeal in March 2025 (314c T 4/25), holding that the debtor had notified illiquidity and that the conditions for continuing the matter were not met; the plan depended on a contribution from a third party that had not even been signed.

Holding. The BGH rejected the further appeal (BGH, order of 23 April 2026 – IX ZB 18/25). It held, first, that the debtor's interest in an appeal against termination does not lapse merely because the notification loses its effect or more than six months have passed.

Second, under § 33(2) sentence 1 no. 1 StaRUG, the court has discretion whether to refrain from terminating the matter despite notified illiquidity or over-indebtedness. In deciding whether opening insolvency proceedings would obviously not be in the interest of all creditors, it may take into account uncertainty about whether projected recovery rates can be achieved.

Where illiquidity results from the acceleration of a claim that the plan is meant to restructure, termination can be avoided only if achieving the restructuring objective is predominantly likely; this is not the case where success depends on a voluntary, insufficiently secured contribution from a third party. The debtor bears the burden of presenting the circumstances that justify continuing.

Why it matters. The decision gives the BGH's guidance on the exceptions in § 33(2) StaRUG and narrows them in practice for debtors. Debtors should not count on continuing StaRUG proceedings once insolvency has occurred. Funding commitments from shareholders or investors must be binding and secured before they can support the restructuring case, and the comparative calculation must be robust enough to withstand scrutiny of its assumptions. Creditors, for their part, can use an acceleration of their claims to put pressure on a weak restructuring case, since the resulting illiquidity forces the court to examine whether the plan is still predominantly likely to succeed.

Related case law: termination clauses and restructuring

StaRUG practice is also shaped by case law outside the StaRUG itself. Counterparties often want to terminate contracts when a customer or supplier enters a restructuring. The StaRUG answers part of this question directly: the pendency of a restructuring matter or the use of the StaRUG instruments is not in itself a ground for terminating contracts, accelerating performance, refusing performance or demanding adjustment, and contrary agreements are ineffective (§ 44(1), (2) StaRUG). Financial contracts covered by netting arrangements and financial collateral are excepted (§ 44(3) StaRUG).

For insolvency-related termination clauses, the BGH clarified the standard in its judgment of 27 October 2022 – IX ZR 213/21. An insolvency-dependent termination clause is invalid if the insolvency-related event alone allows termination and the clause departs from statutory termination rights without legitimate reasons assessed objectively at the time of contracting; clauses in favour of a creditor owed money are regularly invalid, while legitimate reasons may exist in favour of a creditor owed goods or services.

Although that case concerned insolvency rather than the StaRUG, the reasoning matters for drafting supply and service agreements that may be affected by a later restructuring. Our insight on customer insolvency and supplier strategies discusses the consequences for suppliers.

Recurring themes in StaRUG case law

Several themes run through the published decisions and the practice of the restructuring courts.

• Group formation: courts scrutinise whether groups are formed according to appropriate criteria. In the Düsseldorf matter, the local court first considered the division of only two creditors into two groups insufficiently justified. Groups that appear designed merely to manufacture a consenting group are vulnerable.
• Comparative calculation: the comparison with the most likely alternative scenario under § 6(2) StaRUG is central to confirmation, minority protection and appeals. Courts expect a reasoned valuation, and challengers must engage with it.
• Imminent illiquidity: the StaRUG requires imminent, not actual, illiquidity. Once insolvency occurs, the matter is generally terminated unless the narrow exceptions of § 33(2) StaRUG apply.
• Appeals: § 66(2) StaRUG makes appeals against confirmation admissible only for parties who objected, voted against and credibly show material worse treatment, which makes confirmation decisions robust.
• Shareholders: plans can intervene deeply in shareholders' rights, including in listed companies, provided the statutory conditions for cram-down are met.

How to use StaRUG case law in practice

For debtors, the decisions point to three priorities: start early while the company is only imminently illiquid, secure all funding contributions bindingly before notifying the court, and invest in a well-reasoned comparative calculation and group structure. Communication with the restructuring court before filing, where the court allows it, can clarify procedural expectations. Our page on the StaRUG restructuring framework explains the procedure.

For creditors and shareholders, the case law shows that objections must be raised in time and substantiated with alternative scenarios and valuation arguments; a general complaint about haircuts will not succeed. Where the debtor's position is weak, creditors may achieve more by pushing for an insolvency process, for example in self-administration or with a sale, than by challenging a plan. Our insights on the restructuring officer and restructuring court and stabilisation orders cover related procedural tools.

Outlook for StaRUG case law

As restructuring activity in Germany continues, more decisions are likely to be published, including further BGH decisions on confirmation requirements and on the interplay between the StaRUG and insolvency proceedings. The EU's proposed harmonisation of insolvency law may also influence the framework; see our insight on the proposed EU insolvency harmonisation directive. We monitor new decisions and update our analysis accordingly; readers should always check the latest published decisions before relying on a particular approach.

How TRW & Co helps

We advise debtors, sponsors, lenders, bondholders and shareholders in StaRUG proceedings. We prepare restructuring notifications and plans, design group structures and comparative calculations with financial advisers, represent parties in voting hearings and confirmation proceedings and conduct or defend appeals. Our analysis of StaRUG case law feeds directly into plan drafting and litigation strategy. This page is general information, not legal advice. To discuss a restructuring, please contact us.