A landowner had acquired plots of land through a limited liability company and started a residential construction project. His aim was to restructure his finances. Loans amounting to millions were taken out. These were secured by extensive land holdings that had been owned by the noble family for centuries. The urban planning positioning of the project was convincing, but the initiator had chosen the wrong contractual partners and had not calculated the prices correctly. The apartments had been sold too cheaply. Due to the construction defects that had arisen, the purchasers withheld substantial payments. Ultimately, insolvency had to be declared due to insolvency. The proceedings were conducted under so-called self-administration. A new, experienced managing director was appointed.
My task was to devise, communicate, and implement a comprehensive solution as the consulting lawyer for the limited liability company. This was achieved in close consultation with the new managing director, the administrator appointed by the insolvency court, the banks, and the purchasers of the apartments. The shareholder made a financial contribution that preserved the family properties and was far less than the total loss of the family's assets through foreclosure. The financing banks accepted a partial write-off. The purchasers of the apartments were satisfied with a moderately reduced construction quality, but in addition to completion, they received the renovation write-off (Section 7 h EStG), which was decisive for their overall calculation – also with regard to the multiple financing arrangements entered into. Each party involved supported the solution because it was better for their own interests than any alternative.