German bankruptcies have hit their highest level in nearly 12 years, driven by geopolitical uncertainty and weak consumer confidence—a grim milestone that is proving a boon for restructuring practices. “We have seen a significant pan-European uptick in restructuring and distressed credit situations over the past year,” Freshfields restructuring partner Marvin Knapp said. In fact, Freshfields is seeing five times as many mandates as partners did during the COVID-19 pandemic, when companies could kick the can down the road. “A long period of 'amend and extends' in a low-interest environment was followed by COVID where we saw a deluge of state funding in combination with a suspension of insolvency filing obligations in Germany,” Knapp added. Some of the more complex restructuring cases involve large numbers of stakeholders. In the case of Freshfields’ fibre optic client Deutsche Glasfaser, €7 billion ($8.2 billion) in debt is being restructured and is planning on injecting €1 billion more from the owners and existing creditors. Deutsche Glasfaser, owned by global investment firm EQT and the Ontario Municipal Employees Retirement System, is the fastest-growing provider of gigabit Internet connections and one of the largest German restructurings in recent years. Knapp described the fibre optic sector as a “hot” one in need of restructuring, due to poor consumer uptake. Soaring Bankruptcies The Leibniz Institute for Economic Research Halle found that there were nearly 1,400 insolvencies in January 2026, 8% fewer than in December, but 54% higher than the pre-COVID January average between 2016 and 2019. Although over 80% of German bankruptcies are micro businesses, large companies with complex debt need restructuring advice, and the country saw 140 insolvencies for companies with more than 250 employees in 2025, according to the Vienna-based Federation of Business Information Services. This is often where Big Law steps in. Court proceedings from December 2025 show that Kirkland & Ellis U.S. restructuring partners charge between $1,795 and $2,595 an hour. It’s not clear how much the firm charges in Germany. In comparison, one partner at a smaller rival said their rates were more than half that—closer to €800 ($927) an hour—although they are rising. An Economic Mirror “Restructuring is just a very natural mirror, a reflection of where [the] economy stands,” Linklaters partner Sabine Vorwerk said. “We are coming out of decades of Germany being very stable, very strong in terms of economic performance,” Vorwerk added. “It slowed us down in terms of how to deal with our structural issues we are facing.” Vorwerk and Linklaters have advised on German steel giant Thyssenkrupp’s financing and restructuring, with the company assuming a net loss of between €400 million and €800 million, including provisions for restructuring measures, Freshfields, meanwhile, attributes the increasing number of German restructuring mandates to geopolitics. “We have a pan-European crisis. It started with oil and gas prices, triggered by the war in Ukraine and consumer sentiment, [and] has been going down driven by that geopolitical uncertainty,” Knapp said. He has advised on some of the firm’s largest German restructuring deals, including the €1.4 billion ($1.65 billion) international restructuring of auto supplier Webasto. The 'Haircut' The economic outlook doesn’t just translate into more mandates; it also creates more complex and lucrative challenges. “Now it's really about the haircut,” said Vorwerk, referring to a negotiated loss in value for creditors. “There is really something to lose, and that means people are fighting hard,” she added. “The fee volume of the deals doesn’t really depend on the size, but, I think, rather increases due to increased complexity.” McDermott Will & Schulte Germany managing partner Matthias Kampshoff agrees. Deals become more complex if there are different types of financing and large consortiums to deal with. “Then the hours will increase,” the Düsseldorf restructuring partner said. But there is a tension inherent in restructuring: heavily indebted clients can’t afford top rates. “We try to minimize the number of people to also minimize the hours,” Kampshoff said. Client pitches vary depending on the type of company and deal size. “For the company, it's referral work. You know someone in the management or because you start there on the lender side. Then agents running the show from the vendor side look at their favourite firms,” Kampshoff said. “If you have hedge funds in, they often take their own law firms, and sometimes you have a beauty contest.”