The number of self-administration proceedings increased again in 2023
The health and social care sector – particularly hospitals and larger care facilities – as well as the transportation sector were most frequently affected by bankruptcies in 2023. This is shown by the proportion of insolvent companies relative to the total number of companies. In contrast, the crisis development in the construction sector did not affect (yet) the majority of construction companies but primarily impacted property developers and project and real estate developers, which belong to the real estate and housing sector. Additionally, the risk of insolvency increased significantly in the information and communication sector as well as in the hospitality industry.
Significantly more business closures than bankruptcies
In total, around 17,800 companies filed for bankruptcy in Germany in 2023 which was 3,200 more companies than in 2022. Despite the increase, the proportion of bankrupt companies relative to the total number of companies remains low – even looking back over the past 13 years: Only 5.7 out of 1,000 companies became insolvent in 2023. Moreover, bankruptcies only represent a small proportion of business closures – over 90% of all business closings are made by the owners themselves.
The current bankruptcy situation is partly due to the current crises and increased financing costs. Part of the development is also related to the exemption from the obligation to file for bankruptcy during the COVID-19 pandemic, so the subsequent increase was to be expected. Many companies received in the exceptional crisis situation also received financial state support. The review of eligibility for subsidies during the pandemic years may have led some companies to repayments which they could no longer manage.
The number of insolvency applications increased particularly among large companies strongly (+70%). But since the reforms in insolvency law in 2012, it can no longer be automatically assumed that larger companies or those in the form of a GmbH (limited liability company) need to be closed and all locations liquidated. This was recently demonstrated by the example of Peek & Cloppenburg. In total, 345 self-administration proceedings were conducted in 2023, which often initiates a restructuring process. For comparison: in 2022, there were 198 proceedings like this.
