{"id":44095,"date":"2017-11-26T16:08:32","date_gmt":"2017-11-26T14:08:32","guid":{"rendered":"https:\/\/newserver.fyb.de\/produkt\/financial-covenants-in-the-area-of-tension-between-bank-equity-sponsor-and-management\/"},"modified":"2017-11-26T16:08:32","modified_gmt":"2017-11-26T14:08:32","slug":"financial-covenants-in-the-field-of-tension-between-bank-equity-sponsor-and-management","status":"publish","type":"product","link":"https:\/\/www.fyb.de\/en\/produkt\/financial-covenants-in-the-field-of-tension-between-bank-equity-sponsor-and-management\/","title":{"rendered":"Financial covenants in the area of tension between bank, equity sponsor and management"},"content":{"rendered":"

Phil\u00adipp von Braun\u00adschweig<\/strong> \u2014 Lawyer and Part\u00adner P+P P\u00f6llath + Part\u00adners, Munich<\/p>\n

Dr. Benja\u00admin Waitz<\/strong> \u2014 Attor\u00adney at Law P+P P\u00f6llath + Part\u00adners, Munich<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

The finan\u00adcial market crisis has now reached the real economy for some time. Compa\u00adnies\u2019 profits are falling, sales figu\u00adres are collapsing and EBITDA is decre\u00adasing. Howe\u00adver, the dete\u00adrio\u00adra\u00adtion of a company\u2019s econo\u00admic situa\u00adtion is of parti\u00adcu\u00adlar rele\u00advance not only to manage\u00adment and company owners, but also, of course, to the company\u2019s credi\u00adtors and, in parti\u00adcu\u00adlar, lenders, who fear for the repay\u00adment of the loans they have granted.<\/strong><\/p>\n

Meaning of finan\u00adcial covenants<\/strong><\/p>\n

For the share\u00adhol\u00adders of a limi\u00adted liabi\u00adlity company and the share\u00adhol\u00adders of a stock corpo\u00adra\u00adtion, the law provi\u00addes for a crisis warning instru\u00adment. In order not to be able to react bela\u00adtedly to a company crisis that is alre\u00adady beco\u00adming appa\u00adrent, the manage\u00adment board of an AG and the manage\u00adment of a GmbH must imme\u00addia\u00adtely convene a gene\u00adral meeting or share\u00adhol\u00adders\u2019 meeting as soon as a loss of half of the share capi\u00adtal or nomi\u00adnal capi\u00adtal is to be assu\u00admed. This is inten\u00added to give the share\u00adhol\u00adders the oppor\u00adtu\u00adnity to restruc\u00adture the company in good time. For corpo\u00adrate credi\u00adtors, the laws do not gene\u00adrally provide for a corre\u00adspon\u00adding early warning system. For them, the crisis is ther\u00ade\u00adfore usually very diffi\u00adcult to reco\u00adgnize in advance, so that they often only learn of the criti\u00adcal econo\u00admic situa\u00adtion of the company when insol\u00advency can hardly be aver\u00adted. As a rule, this legal situa\u00adtion is hardly accep\u00adta\u00adble for a lender who has to fear for the default of all loans gran\u00adted by him. For this reason, lenders require their borro\u00adwers to indi\u00advi\u00addu\u00adally provide so-called finan\u00adcial covenants as an instru\u00adment for preven\u00adtive early crisis detec\u00adtion in order to be able to iden\u00adtify an impen\u00adding corpo\u00adrate crisis as early as possi\u00adble. Finan\u00adcial covenants relate to the finan\u00adcial situa\u00adtion of the borrower, who is requi\u00adred to main\u00adtain certain ratios rela\u00adting to equity, debt, earnings and\/or liqui\u00addity. These ratios are inten\u00added to provide the lender with infor\u00adma\u00adtion about the borro\u00adwer\u2019s ability to repay the loan and make peri\u00adodic debt service payments.<\/p>\n","protected":false},"featured_media":41264,"comment_status":"open","ping_status":"closed","template":"","meta":{"wp_typography_post_enhancements_disabled":false},"product_brand":[],"product_cat":[2452,2511,2569,2570],"product_tag":[1873,2082,2084,2086,2088,2090],"class_list":{"0":"post-44095","1":"product","2":"type-product","3":"status-publish","4":"has-post-thumbnail","6":"product_cat-ebook-en","7":"product_cat-fyb-2010-2","8":"product_cat-philipp-von-braunschweig-en","9":"product_cat-dr-benjamin-waitz-en","10":"product_tag-financial-covenants-en","11":"product_tag-benjamin-waitz-en","12":"product_tag-financial-market-crisis","13":"product_tag-ebitda-en","14":"product_tag-corporate-creditors","15":"product_tag-philip-of-brunswick","16":"pa_sprache-english-3","17":"pa_sprache-german","19":"first","20":"outofstock","21":"taxable","22":"shipping-taxable","23":"purchasable","24":"product-type-variable"},"yoast_head":"\nFinancial covenants in the area of tension between bank, equity sponsor and management - FYB Financial Yearbook<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.fyb.de\/en\/produkt\/financial-covenants-in-the-field-of-tension-between-bank-equity-sponsor-and-management\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Financial covenants in the area of tension between bank, equity sponsor and management - FYB Financial Yearbook\" \/>\n<meta property=\"og:description\" content=\"The financial market crisis has now reached the real economy for some time. 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