Comprehensive company analysis that meets German auditor standards.

A consistent plan of action is an absolute necessity for firms that find themselves in crisis situations. But a recovery action plan is not the only solution required to overcome the crisis; businesses will also need a way to communicate a concise overview of their situation – the recovery blueprint. In particular, the company’s stakeholders – first and foremost, its equity investors and lenders – will want to know which recovery measures are required to restore the company to profitability and how much capital is needed to achieve this goal. In addition, a far-reaching series of legal requirements must be met to reduce liability risks in the event of a company crisis.

Recovery blueprints (Sanierungskonzepte) and recovery reports (Sanierungsgutachten) are created in a variety of circumstances in accordance with German Institute of Public Auditors standards (IDW S6) and German Federal Court of Justice (BGH) rulings. Reasons for creating these documents include:

• Informing a funding decision for equity investors and lenders during the crisis
• Spreading confidence to creditors who consent to a part-payment agreement during the company crisis
• Protecting company management or board members in connection with their liability under criminal (e.g. German Penal Code, Section 283 onwards) or civil law (German Limited Liability Companies Act, Section 64)
• Safeguarding the rescue exemption provided by Section 39(4) of the German Insolvency Statute
• Providing a basis for negotiations with stakeholders
• Providing a basis for the procurement of public subsidies

These recovery blueprints or reports are typically created according to a standardised process:

A recovery blueprint that includes an expert opinion is called a recovery report. To ensure that these reports take account of the legal requirements, it must meet certain content guidelines. For instance, it must contain basic information about the company’s current business situation and legal position, analysis of the causes of the crisis and the stage to which it has progressed, an explanation of the vision for the company’s future, a description of the action plan to overcome the crisis and avert the risk of insolvency; and a fully integrated business plan.