By means of insolvency contestation, the insolvency administrator can reclaim payments made by the insolvent company. However, the Federal Court of Justice has restricted this possibility.
The recent crises have presented a number of companies with significant economic challenges. They could not always be overcome, leading to insolvency in the end. Customers and service providers of the insolvent company are also always affected by insolvency. As a commercial law firm with a focus on corporate law, MTR Legal Rechtsanwälte represents debtors and creditors in insolvency law.
A sharp tool in insolvency law is the insolvency contestation by the insolvency administrator. According to §§ 129ff. of the Insolvency Act, the insolvency administrator can reclaim payments made by the company before the insolvency occurred. This creates significant uncertainty among the company’s customers and service providers. They have provided their services and are now being asked by the insolvency administrator to return the payments they received. In some cases, the insolvency administrator demands payment returns for transactions that date back years.
Companies that have granted their customers payment facilitations, such as installment payments, are often affected by insolvency contestations. Insolvency administrators often interpreted such behavior as the creditor having granted payment facilitations because they were already aware of their business partner’s impending insolvency, and therefore demanded the payments back. After a legislative change, this should not be so easily possible anymore. The insolvency administrator should only be able to reclaim payments if the creditor already knew at the time of receiving the payments that their customer was definitely insolvent. If payment facilitations such as installment payments were granted, this alone does not imply that the creditor knew of the debtor’s insolvency.
Corresponding rulings from the Federal Court of Justice already exist. For example, in a ruling on February 10, 2022, the BGH made it clear that a consistently sluggish payment behavior from the debtor does not imply impending insolvency (Ref.: IX ZR 148/19).
Additionally, the period for intentional contestation has been reduced from ten to four years.
Before responding to the insolvency administrator’s claims for repayment, it should be examined whether the insolvency contestation claims are justified at all.
At MTR Legal Rechtsanwälte, experienced attorneys advise in corporate and insolvency law.
