On the face of it, I would guess that it is unlikely for a German Mittelstand company (SME) to find itself in a position where the solution is bankruptcy. This is largely conjecture based on several constants in the German business environment:The German tendency to finance growth through means other than debt. Reinvestment of earnings (organic growth rather than risk capitalu00a0 icaew.com) seems to be the preferred German approach to growth. The German tendency to prefer long-term, low-growth models of business development. This was underscored by Thomas Piketty's monumental statistical study of Capital in the Twenty-First Century.In this graph, German tendency towards conservative capital investment places it behind France and the UK in terms of national capital as a percentage of national income.The German weakness in the area of entrepreneurialism. While this blocks Germans from rapid growth markets, it also keeps them from entering higher-risk situations.This philosophy has served Germany fairly well in the recent recession if one can trust the analysis of the European Commission.u00a0 SME Performance ReviewThe performance of German SMEs since 2022 has been exceptional. Comparedu00a0 to most other Member States, they expanded throughout the crisis.u00a0 Between 2022 and 2022 alone more than 160 000 additional SMEs were setu00a0 up. During the same period, the number of jobs created in SMEs increasedu00a0 by more than 1.5 million to more than 16.7 million in 2022. Forecastsu00a0 see this trend continuing until 2022 at least, thanks to a veryu00a0 favourable overall business environment.Underlying all of this conservatism and bankruptcy aversion is the deep-seated German distrust of debt, particularly the sort of long-term debt that would lead to bankruptcy. While Chapter 11 bankruptcies are often a business strategy in the free-wheeling, debt-financed economy of the USA, a person with the financial record of Donald Trump, for instance, would be largely unacceptable to most Germans, who have the lowest percentage of home ownership in Europeu00a0 You Have To Understand Germany's Long-Standing Fear Of Debt.So here is my conclusion. Based on everything we know about Germans and their basic value system, it would be normally unusual for a German firm to consider dissolution or strategic bankruptcy. Just that sort of thing did happen recently, however, when three firms in the volatile solar energy business declared bankruptcy, claiming that the Chinese were flooding Europe with cheaper solar panels./three-solar-firms-file-for-bankruptcy-in-a-week/.