insolvency proceedings
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insolvency proceedings
A legally regulated procedure for a person or company that can no longer pay its debts. The goal is to satisfy the creditors as much as possible, either through restructuring or through liquidation of the company.
Nach wochenlangen Verhandlungen musste die Fluggesellschaft schließlich ein Insolvenzverfahren beantragen.
After weeks of negotiations, the airline finally had to file for insolvency proceedings.
This long word is easy to understand if you break it down: It consists of 'die Insolvenz' (insolvency) and 'das Verfahren' (procedure/proceedings). The '-s-' in between is a linking sound that connects the two parts.
Das gerichtliche Verfahren kann mehrere Jahre dauern.
The court proceedings can take several years.
Certain verbs are important for correct usage. A company can 'beantragen' (apply for) or 'anmelden' (file for) insolvency proceedings. The court can 'eröffnen' (open) or 'einleiten' (initiate) them.
Die Baufirma musste letzte Woche ein Insolvenzverfahren anmelden.
The construction company had to file for insolvency proceedings last week.
The word belongs to a family of terms related to insolvency. These include the adjective 'insolvent' (insolvent/unable to pay) and the noun 'die Insolvenz' (insolvency itself).
Wenn eine Firma ihre Rechnungen nicht mehr bezahlen kann, ist sie insolvent.
If a company can no longer pay its bills, it is insolvent.
liquidation
In insolvency proceedings, a company's assets may be sold because it can no longer pay its debts. In a liquidation, a company is wound up and its assets are sold, but the company may still be solvent. The decisive question is therefore whether insolvency is involved.
Weil die Firma ihre Schulden nicht mehr bezahlen kann, wird ihr Vermögen im Insolvenzverfahren verkauft.
Because the company can no longer pay its debts, its assets are sold in insolvency proceedings.
Obwohl die Firma noch zahlungsfähig ist, verkaufen die Eigentümer bei der Liquidation ihr gesamtes Vermögen.
Although the company is still solvent, the owners sell all its assets during the liquidation.
