Stillhalten oder Einfordern?
A key objective of the current German coalition government is the reform of the clawback provisions in the German Insolvency Code (Insolvenzordnung – InsO). To address this, the German Federal Ministry of Justice and Consumer Protection recently published a draft bill for discussion. The German government is expected to remain in office until 2017, making it highly likely that this reform will become law, in the course of 2015-2016.
Background and objective of the reform
Minor instalment payments alone – also in the event of late payments – may not be sufficient to trigger knowledge of the debtor’s imminent illiquidity within the meaning of section 133 German Insolvency Act
Overview
Impending major reform of German insolvency clawback regime
A key objective of the current German coalition government is the reform of the clawback provisions in the German Insolvency Act (Insolvenzordnung - InsO). To address this, the German Federal Ministry of Justice and Consumer Protection recently published a draft bill for discussion.
The German government is expected to remain in office until 2017, making it highly likely that this reform will become law, in the course of 2015-2016.
Background and objective of the reform
The Federal Court of Justice (Bundesgerichtshof – BGH) on 5 March 2015 issued a decision (case no. IX ZR 133/14, available here) that is of immense relevance for all creditors and debtors that face the need of a subordination agreement (Rangrücktrittvereinbarung) under German law.
The German Government proposes amendments to the German insolvency Act (‘InsO’), which will limit the insolvency administrator’s rescission rights, especially his claims under s. 133 para 1 InsO.
Current Law
Overview
In November 2015, the German legislator passed the Resolution Mechanism Act (Abwicklungsmechanismusgesetz, AbwMechG). The law introduces, among other things, Section 46f (5) et seqq. of the German Banking Act (Kreditwesengesetz, KWG), which requires that claims under certain unsecured debt instruments be subordinated to general senior unsecured obligations in an insolvency proceeding involving a German bank.
On March 3 2015 the Hamburg Local Court (67a IN 400/14) expressly contradicted the Bremen Regional Court's August 14 2011 decision (2 T 435/11) regarding whether vessels are protected from arrest during preliminary insolvency proceedings (for further details please see "Are vessels protected from arrest du
In a judgment dated 26 / 03 / 2015, ref. no. IX ZR 302 / 13, the Federal Court of Justice (BGH) held that a provisional insolvency administrator is personally liable for monies paid into the escrow account in the event of claims of unjust enrichment being made due to the payments having no proper basis in law.
The ruling related to the following situation: