The German Federal Supreme Court (Bundesgerichtshof) recently held that creditors cannot bring claims against the Hellenic Republic before the German courts in the context of Greece's debt restructuring in 2012 , finding that Greece enjoys immunity from jurisdiction before the German courts (decision of 8 March 2016; docket number VI ZR 516/14).
Background and facts
Key points
The ‘qualified subordination’ tool is a useful device for a German company that may be balance-sheet insolvent.
Background
German insolvency law requires the directors of a company to file for insolvency when the company is over-indebted pursuant to sec. 19 German Insolvency Code (‘InsO’). The failure to comply with this obligation is a criminal offence, and can also trigger directors’ liabilities under German corporate law.
‘Qualified Subordination’
Mit Urteil vom 26. März 2015, AZ IX ZR 302 / 13, entschied der BGH, dass ein vorläufiger Insolvenzver- walter für Zahlungen auf das Voll- rechtstreuhandkonto persönlich haf- tet, wenn Bereicherungsansprüche wegen rechtsgrundloser Zahlungen geltend gemacht werden.
Dieser Entscheidung lag folgender Sachverhalt zu Grunde:
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