We summarise the background and outcomes of Case C-73/20 – Oeltrans, an important ruling for liquidators faced with the avoidance of a third party payment and a conflict of laws.
The facts
The UK's withdrawal from the European Union has created uncertainty around insolvency law. Let's look at how things have changed in the wake of Brexit, and what that means for current and future German insolvency proceedings.
What is the state of play post-transition period?
According to German law, managing directors of limited liability companies are personally liable for payments made despite insolvency. Directors may even be liable when third parties make payments to the insolvent company's current account that has a negative balance because such payment will constitute a payment by the insolvent company to the bank
Background
According to German law, managing directors of limited liability companies are personally liable for payments that have been made despite insolvency. This can lead to widespread liability.
Background
The EU-Commission is planning a European wide pre-insolvency (preventive) restructuring procedure in order to harmonise pre-insolvency proceedings within the EU, thus strengthening the EU domestic and capital markets, bringing clarity to cross-border transactions, and preventing forum-shopping.
At the end of 2016, the European Parliament issued a proposed directive (COM (2016)723/30/EU) in this regard (Directive Proposal).
Background
Creditors of an insolvent entity file their claims against the entity with the insolvency administrator (Germany) or insolvency court (Austria). If a claim is accepted, it is registered in the insolvency table as an accepted claim and the creditor is listed as an insolvency creditor in the insolvency proceedings.
Key point
The restructuring of the AVK Group shows what chances the “Law for Further Facilitating the Restructuring of Companies” provides regarding the restructuring of group entities in the group structure and incorporating them back into the group.
Background