Germany: Insolvency/Bankruptcy/Re-Structuring

Bridge loans provide critical short-term liquidity during corporate restructuring, but they carry significant legal risks for both lenders and borrowers in crisis situations. This analysis examines the legal framework governing bridge financing in restructuring contexts, including insolvency avoidance rules, unconscionable lending liability, and the ongoing obligation to file for insolvency.

Filing for insolvency carries significant legal and reputational consequences, but what happens when a company's financial situation improves after filing? This article examines the legal framework...

German insolvency law's principle of equal creditor treatment faces a critical challenge through Section 131 of the Insolvency Code, which addresses "incongruent coverage" - situations where creditors receive security or satisfaction they weren't entitled to receive, or not in that form or timing. The practical stakes are substantial: within the last month before insolvency filing, objective incongruence alone suffices for avoidance actions, with no requirement to prove the creditor's knowledge of the debto

The Federal Fiscal Court rules that insolvency administrators' remuneration may be recognized as tax-deductible provisions in the debtor's tax balance sheet. This landmark decision aligns tax accounting treatment with statutory accounts and provides clarity for insolvency practitioners on when economic obligations arise for remuneration claims.

The Higher Regional Court of Düsseldorf has issued a landmark ruling clarifying managing director liability under § 15b InsO in intra-group cash pool structures. The judgment addresses critical questions about payment cessation, balance sheet insolvency, and the standard of care applicable after expiry of the grace period, with significant implications for corporate groups operating cash pooling arrangements.

The Higher Regional Court of Düsseldorf has issued a comprehensive ruling on director liability under § 15b InsO in corporate cash pool structures. The decision clarifies critical questions regarding the payment concept, cessation of payments in group structures, and the standard of care after expiration of the grace period, confirming the continued applicability of principles developed by the Federal Court of Justice under former § 64 GmbHG.