Instead it will go under creditor protection like Condor has since TC went under. Its a unique contruct in German insolvency law. Basically an administrator will have to be consulted for each major decision.
But that would mean that Lufthansa is under no obligation to issue cash refund for cancelled flights. Court titles cannot be enforced anymore.
Who is his or her right mind is going to book another flight (in the future) with Lufthansa, if it's clear that the money is gone, once a flight is cancelled by the airline?