BGH on Intentional Avoidance in Sale-and-Lease-Back Transactions
By judgment of 21 May 2026 – IX ZR 168/24 – the Bundesgerichtshof (BGH, Federal Court of Justice) specified key standards for the avoidance under insolvency law of sale-and-lease-back transactions. The central issue is when, in the case of a transaction for consideration involving an obligation entered into with a related third party, an intent to prejudice creditors within the meaning of § 133 para. 1 InsO (German Insolvency Code) may be considered.
According to the decision, it is not sufficient to assess such a transaction solely on the basis of whether the purchase price and the consideration appear appropriate in terms of value. Rather, the entire economic context must be evaluated. Under the standards set by the BGH, a sale-and-lease-back transaction may prejudice creditors and be avoidable under § 133 para. 1 InsO even if the purchase price is in line with the market and the subsequent rent is customary for the location.
Facts: Sale and Leaseback of Business Properties
Shareholding Structure and Financial Situation of the Debtor
Until 19 July 2019, the claimant was the majority shareholder, holding 87.5 percent, of a GmbH (German limited liability company), over whose assets insolvency proceedings were later opened. Its sole parent company was a company based in China. In 2018, that company had issued fixed-term letters of comfort in favor of the later debtor totaling EUR 10 million.
At the end of 2018, a significant financial crisis at the debtor became apparent. By email dated 30 January 2019, the managing director informed the claimant that the liquidity situation was dramatic and that illiquidity had occurred. On 24 April 2019, the claimant and the debtor also entered into a loan agreement for EUR 500,000.
Sale-and-Lease-Back Transaction in May 2019
By notarized purchase agreement dated 9 May 2019, the debtor sold its business properties to the claimant as part of a sale-and-lease-back transaction. The agreed purchase price was EUR 3.5 million. The claimant paid EUR 3 million; it set off the remaining purchase price against its loan claim.
The debtor immediately leased the properties back. The monthly rent amounted to approximately EUR 29,000. In addition, the claimant sold its shares in the debtor to the co-shareholders in equal parts at a purchase price of EUR 1 each.
Course of Proceedings before the LG, OLG Frankfurt and BGH
Upon an application dated 5 June 2020, insolvency proceedings over the debtor’s assets were opened on 1 September 2020. The defendant was appointed as insolvency administrator. The claimant demanded that he vacate and surrender possession of the properties.
By way of counterclaim, the insolvency administrator asserted a claim against the claimant for retransfer of ownership on the basis of insolvency avoidance. The Landgericht (LG, Regional Court) upheld the claim and dismissed the counterclaim. The defendant’s appeal before the OLG Frankfurt (Oberlandesgericht Frankfurt, Higher Regional Court of Frankfurt) was unsuccessful.
The IX. Zivilsenat (Ninth Civil Senate) of the BGH set aside the judgment of the OLG Frankfurt, which had been unfavorable to the insolvency administrator, and remitted the case. On the basis of the findings made to date, it could not be ruled out that the insolvency administrator could successfully raise the defense of an impermissible exercise of rights under § 242 BGB (German Civil Code) against the claimant’s surrender claim.
Standard under § 133 para. 1 InsO
Legal Act, Prejudice to Creditors and Knowledge
Under § 133 para. 1 sentence 1 InsO, a legal act is avoidable if the debtor performed it during the ten years prior to the application for the opening of insolvency proceedings with the intent to prejudice its creditors, provided the other party knew of that intent at the time of the act.
The BGH regarded both the conclusion of the property purchase agreement and the transfer of title to the real property as an indirect prejudice to creditors within the meaning of § 129 para. 1 InsO. At the time of the last oral hearing, the purchase price paid had been used up and was therefore no longer available to satisfy the creditors.
No Isolated Assessment of Equivalence in Value
In the BGH’s view, the appellate court had erroneously applied principles that govern intentional avoidance of congruent satisfaction. It had failed to recognize that the equivalence in value of the performances promised under a contract governed by the law of obligations does not make the conclusion of the contract a congruent satisfaction.
According to the BGH, the relevant point in time is immediately before acceptance of the purchase offer. Transactions for consideration involving obligations are not to be reduced in isolation to performance and counter-performance, but must be assessed in their overall context.
Intent to Prejudice Creditors in Transactions for Consideration
An intent to prejudice creditors within the meaning of § 133 para. 1 InsO exists where the debtor intends to prejudice its creditors or recognizes and accepts such prejudice as a presumed consequence of its conduct. In the case of transactions for consideration involving obligations, such intent may be affirmed under the decision only under strict conditions.
In addition to cases involving a transfer of assets, an intent to prejudice creditors will generally be considered only where special circumstances exist beyond the mere exchange of performance and counter-performance. These include in particular:
- special advantages in favor of the contractual partner,
- special disadvantages for the prospects of satisfaction of the other creditors,
- economic effects that are not visible when purchase price and consideration are viewed in isolation.
The mere equivalence in value of performance and counter-performance therefore does not preclude avoidance. The decisive factor is whether the transaction, in its overall effect, impairs the satisfaction of creditors and whether the further requirements of § 133 para. 1 InsO are met.
BGH’s Objections to the Decision of the OLG Frankfurt
Liquidity Advantage, Set-Off and Tax Consequences
The BGH criticized the appellate court for failing to give sufficient consideration to the effects of the sale-and-lease-back transaction. It had essentially focused on the equivalence of the exchanged performances.
In the BGH’s view, insufficient consideration was given to the fact that the liquidity advantage may have been reduced by tax consequences. In any event, the appellate court had not adequately taken into account that the set-off of the remaining purchase price created a set-off position in favor of the claimant.
Letters of Comfort from the Parent Company
According to the decision, it should also have been examined what effects the sale-and-lease-back transaction had on the parent company’s letters of comfort. Of particular importance was whether the structure led to an indirect release of the parent company from obligations under the letters of comfort.
This aspect was significant for the overall assessment because, without the property transaction, a claim under the letters of comfort might potentially have been in question. The BGH thereby emphasized that indirect economic relief for related third parties may also have to be included in the assessment.
Sale of the Shares for EUR 1
Furthermore, in the BGH’s view, the appellate court had not sufficiently taken into account that the claimant sold its shares in the debtor to the minority shareholders at a purchase price of only EUR 1. The low purchase price could provide an indication of the value the parties attributed to the shares.
This circumstance, too, was not to be assessed in isolation, but had to be considered as part of the overall evaluation of the transaction and of the debtor’s economic situation at the time.
Cessation of Payments and Substantiation of Illiquidity
Another focal point of the decision concerns the cessation of payments. The BGH clarified that a cessation of payments requires conduct by the debtor that is outwardly apparent. Purely internal communications to shareholders or corporate bodies are not sufficient for this purpose.
The managing director’s email to the majority shareholder, in which he referred to a dramatic liquidity situation and the occurrence of illiquidity, was therefore not sufficient on its own to assume a cessation of payments. In this respect, the Senate followed its case law on cessation of payments and intent to prejudice creditors.
As a rule, illiquidity must be substantiated by an orderly comparison of due liabilities and liquid funds. This liquidity status is dispensable only if a cessation of payments under § 17 para. 2 sentence 2 InsO triggers the presumption of illiquidity.
Classification of the Decision
The judgment is listed under the short title “Cessation of Payments and Intent to Prejudice Creditors in Sale-and-Lease-Back” (translation). It follows the avoidance case law of the IX. Zivilsenat, including decisions bearing the case numbers IX ZR 78/20, IX ZR 17/22 and IX ZR 146/11.
The full text of the decision has been available as a PDF in the BGH decision database since the publication date of 21 May 2026. The decision was also presented in NZI 19/2026 in the NZI-aktuell supplement.
For the insolvency-law assessment of sale-and-lease-back transactions, the decision shows that economic equivalence is not, as a starting point, sufficient to exclude intentional avoidance. The decisive factor remains the overall effect of the transaction on creditor satisfaction, particularly in transactions with related persons or companies.
Frequently Asked Questions
When is a sale-and-lease-back transaction avoidable under § 133 para. 1 InsO?
A sale-and-lease-back transaction may be avoidable under § 133 para. 1 InsO if the debtor acts with intent to prejudice creditors and the other party is aware of that intent. According to the BGH, this may also be considered where the purchase price is in line with the market and the rent is customary for the location, if the overall context reveals special advantages or disadvantages for creditor satisfaction.
What did the BGH decide on 21 May 2026 – IX ZR 168/24 regarding cessation of payments?
The BGH clarified that a cessation of payments requires conduct by the debtor that is outwardly apparent. An internal email from the managing director to the majority shareholder was not sufficient for this purpose.
What practical consequences does the BGH judgment IX ZR 168/24 have for companies in sale-and-lease-back transactions?
For companies, the decision makes clear that in sale-and-lease-back transactions during an economic crisis, the purchase price and rent are not the only decisive factors. Set-off positions, letters of comfort, tax effects and the impact on the prospects of satisfaction of other creditors may also be included in the assessment.
Insolvency-Law Advice on Complex Structuring Matters
Sale-and-lease-back transactions, letters of comfort, intra-group financing and avoidance risks can be closely interconnected in insolvency law. Especially in the case of companies under economic pressure, a precise classification of the legal and economic context is essential. MTR Legal Rechtsanwälte advises companies, investors and high-net-worth individuals on questions concerning the insolvency-law assessment of such matters; further information can be found under Legal advice in insolvency law.
