5. Juli 2018
Under section 133 para.1 of the German Insolvency Act (InsO) a transaction made by the debtor in the 10 years prior to the application to open insolvency proceedings (or subsequent to such application) with the intention to disadvantage its creditors may be contested by the insolvency administrator if the other party was aware of the debtor’s intention on the date of such transaction. Such awareness is presumed by law if the other party knew (i) the debtor’s illiquidity was imminent, and (ii) that the transaction constituted a disadvantage for the creditor.
In a decision dated 18 January 2018 (IX ZR 144/16) took the opportunity to clarify the position on criteria for determination of a debtor’s intention to disadvantage its creditors and of a creditor’s awareness of such intention of the creditor.
Such payment behaviour of the debtor can only be interpreted in such a way that the debtor stands “at the edge of a financial precipice”.
Under section 133 para.1 of the German Insolvency Act (InsO) a transaction made by the debtor in the 10 years prior to the application to open insolvency proceedings (or subsequent to such application) with the intention to disadvantage its creditors may be contested by the insolvency administrator if the other party was aware of the debtor’s intention on the date of such transaction. Such awareness is presumed by law if the other party knew (i) the debtor’s illiquidity was imminent, and (ii) that the transaction constituted a disadvantage for the creditor.
In a decision dated 18 January 2018 (IX ZR 144/16) took the opportunity to clarify the position on criteria for determination of a debtor’s intention to disadvantage its creditors and of a creditor’s awareness of such intention of the creditor.
Such payment behaviour of the debtor can only be interpreted in such a way that the debtor stands “at the edge of a financial precipice”.
In view of this decision the creditor is forced to act very quickly if the debtor does not pay its debt completely when it becomes due. If the creditor does not take any measures to enforce its claims or takes such measures too late there is a very high risk of a claw-back by the insolvency administrator if the creditor receives partial payments from the debtor.
In view of this decision the creditor is forced to act very quickly if the debtor does not pay its debt completely when it becomes due. If the creditor does not take any measures to enforce its claims or takes such measures too late there is a very high risk of a claw-back by the insolvency administrator if the creditor receives partial payments from the debtor.