With a recent draft act to amend the German Insolvency Code (Insolvenzordnung – InsO), the German Federal Ministry of Justice and Consumer Protection intends to reduce uncertainty regarding insolvency claw-back, in particular regarding Sec. 133 InsO. The result may be that restructuring opinions that are now market standard when (re)financing financially troubled companies in Germany become redundant.
Current legal status
Germany’s Frankfurt District Court recently dealt with the question of whether a debtor’s lawyers’ fees arising from restructuring advice prior to insolvency could be challenged and claimed back in insolvency. The court held in the first instance (07.05.2015, Az. 2-32 O 102/13) that the lawyers of an insolvent German company in the solar industry had to repay €4.5 million after the out-of-court restructuring failed.
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A German insolvency administrator represented by Taylor Wessing claims back fees amounting to € 4.5 million from a leading German law firm paid by the insolvent company for restructuring advice. The claim is based on German rescission law.
In a previous update on the German law perspective regarding bunker supplies, some significant problems associated with bunker supplies under German law were highlighted (for further details please see "Bunker supplies – maritime lien and risk of vessel arrest").
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
Report contents:
German Federal Court of Justice decision paves the way for bond restructurings under 2009 Bonds Act.
This post addresses the question of how retention of title (“ROT”) provisions are effectively agreed to as part of the contractual relationship between a supplier and its German customer under German law.