Background
When the validity of an agreed interest rate is the subject of a dispute between the parties to a loan agreement in Germany, the insolvency courts do not have jurisdiction to deal with the dispute. This is something only the civil courts can do.
Impact
If lenders provide sufficient evidence of the loan interest amount, ie usually the loan agreement, the debtor is required to prove that the interest rate contradicts public policy or is unreasonably high.
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?
Die Hotelindustrie gehört zu den Branchen, die von der Corona-Krise am schwersten getroffen werden. Mitunter geht es um das schlichte Überleben der betroffenen Unternehmen. Wir möchten Ihnen in einem interdisziplinären Webinar einige der drängendsten Fragen beantworten, die Ihnen helfen sollen, durch diese herausfordernde Zeit durchzukommen.
Folgende Themen stehen im Fokus des Webinars:
In 2021, the German legislator changed the rules of conduct by inserting a further section into the German Insolvency Code (InsO).
Background
In a recent judgment on directors’ liability (Bundesgerichtshof, 18 November 2020, IV ZR 217/19), the German Federal Court of Justice (Bundesgerichtshof) has clarified the scope of D&O insurance coverage, holding that company directors are entitled to its protection.
Background
Das Coronavirus SARS-CoV-2 hat Deutschland infiziert. Auch solide Unternehmen drohen in Folge dessen unverschuldet in die Krise zu stürzen. Während die operativen Tätigkeiten aufgrund der Isolierung ganzer Belegschaften oder gesprengten Lieferketten vorübergehend eingestellt werden, bleiben Verbindlichkeiten wie Miete, Gehälter, Sozialabgaben und Kapitaldienst in rechtlicher Hinsicht gegen das Coronavirus immun. Fortlaufende Fixkosten denen kein operatives Ergebnis gegenübersteht, belasten die Liquidität und stellen einen existenzbedrohenden Angriff für jede Unternehmensfinanzierung dar.
In a recent judgment on directors’ liability, the Higher Regional Court of Düsseldorf (Oberlandesgericht Düsseldorf) held that startup companies are not deemed to be overindebted if they are receiving adequate finance from their shareholders or third parties.
Background
A draft bill published on 19 September 2020 intends to further develop the existing restructuring and insolvency law in Germany.
It includes fundamental amendments to German insolvency and restructuring law to stabilise the restructuring of businesses. It also ratifies the Directive (EU) 2019/1023 of the European Parliament and of the Counsel 20 June 2019 on restructuring and insolvency into German national law. The draft bill will come into force on 1 January 2021.
What does this mean for debtors and creditors?
In a recent decision, the German courts clarified the circumstances under which repayments on a loan not granted by a direct shareholder of an insolvent borrower could qualify as repayments on a shareholder loan, and therefore avoid being contested in insolvency proceedings.
Background
The German court has published LG München I v. 13.07.2021 - 6 O 17571/20 – the first published ruling on COVInsAG. We unpack the key takeaways from the decision below.
Background
To mitigate the economic effects of the pandemic, the German government passed the COVID-19 Insolvency Suspension Act (COVInsAG) to temporarily suspend the obligation on directors to file for insolvency where the debtor's insolvency was due to the pandemic. The COVInsAG (Section 2(1) Nos.2 and 4) also suspends large parts of the rules on insolvency avoidance.