Status follows headcount
Economic importance without the Article 169 test is insufficient.
Municipal participation
The local authority and, where necessary, other public bodies participate.
Jobs may be a sale condition
The sale may require preservation of at least half the jobs for a limited period.
Proving status
| Test | Value | Evidence |
|---|---|---|
| Employee share | At least 25% of the locality’s working population | Payroll, employment statistics and boundaries |
| Absolute headcount | More than 5,000 employees | Average headcount records |
| Public participant | Local authority participates | Court order and competence |
| Guarantee | May secure debtor obligations | Guarantee instrument and schedule |
| Sale | May preserve at least 50% of jobs | Public request and sale contract |
Status is established in the particular case. Locality boundaries, working population and debtor headcount must be measured on comparable dates. A letter describing social importance is not a substitute.
Public guarantee and rehabilitation
The local authority participates and a federal or regional authority may be joined. With a public request and guarantee, the court may introduce external administration despite a creditor decision or extend rehabilitation or external administration by no more than one year.
Enterprise sale
The enterprise may be sold as a complex during external administration or liquidation. On a public request, the contract may require at least 50% of jobs to be retained for up to three years. If the enterprise is not sold on those terms, assets may be sold under the general rules.
Practical steps
- Calculate the employee share or prove more than 5,000 employees.
- Collect general insolvency and claim evidence.
- Ensure participation of competent public authorities.
- Assess the source and terms of a public guarantee.
- Prepare a rehabilitation and employment forecast.
- Review enterprise-sale and job-preservation conditions.
See corporate bankruptcy, strategic enterprise insolvency and natural monopoly insolvency.
Frequently asked questions
Is every large factory city-forming?
No. The 25% locality test or more than 5,000 employees must be established.
Who participates besides creditors?
The local authority and any federal or regional authority joined by the court.
Must the state pay the debts?
No. Liability requires a valid guarantee or another legal basis.
How long can a procedure be extended?
Article 172 permits an extension of no more than one year with a guarantee.
Will every job be preserved?
No guarantee exists. A sale condition may preserve at least 50% for up to three years.
Official sources
Need to prove special status?
We can review headcount, public participation and procedure options without guaranteeing an outcome.
Initial consultation