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Previous posts have explained some aspects of the ROT concept in Germany (Part 1, Part 2, 

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:

A previous post introduced the general concept of ROT provisions as a means to protect suppliers as creditors in the insolvency of their customers. The basic principle of ROT under German law is that the supplier remains the owner of the goods which it has supplied to its customer until the customer has fully paid the purchase price for the goods.

Key point

In a financial restructuring, creditors have to pay attention that the restructuring undertakings of the insolvent company are likely to be achieved.

Background

Under German insolvency law, the insolvency administrator may challenge a transaction if an insolvent company intended to disadvantage its creditors (and the other party knew that intention). The German Supreme Court presumes such intention if a company knew about its impending illiquidity.

Facts

This is the second part of a two-part article on ways to restructure debt taken up by a German company. The first part looked at financings governed by English law, this second part deals with German law-governed debt.

Part II – Financings governed by German law (restructuring through protective shield proceedings or schemes of arrangement)

INTRODUCTION