News and Press - Lawyers Attorneys MTR Rechtsanwälte Germany - Cologne Berlin Bonn Düsseldorf Frankfurt Hamburg Munich Stuttgart https://www.mtrlegal.com/en/ News and Press releases of Lawyers Attorneys MTR Rechtsanwaltsgesellschaft mbH Germany Cologne Berlin Bonn Düsseldorf Frankfurt Hamburg Munich Stuttgart en MTR Rechtsanwaltsgesellschaft mbH Fri, 07 May 2021 21:37:27 +0200 Fri, 07 May 2021 21:37:27 +0200 TYPO3 news-337 Thu, 29 Apr 2021 08:58:32 +0200 Finanzgericht Düsseldorf: No tax exemption for flat-rate bonuses https://www.mtrlegal.com/en/news-and-press/detail/news/finanzgericht-duesseldorf-no-tax-exemption-for-flat-rate-bonuses.html Bonuses for night work and working on Sundays are only tax exempt if they are awarded on an individual and not a flat-rate basis. That was the verdict of the Finanzgericht (FG) Düsseldorf – the Fiscal court of Düsseldorf – in a judgment from November 27, 2020.

Those who work nights or on Sundays and holidays are often rewarded with bonuses from their employer. However, according to a ruling of the Finanzgericht Düsseldorf from November 27, 2020, it is important to make sure that the bonuses are awarded on an individual and not a flat-rate basis (Az.: 10 K 1580/18 H(L)). We at the commercial law firm MTR Rechtsanwälte can report that bonuses are not considered to be tax exempt if they are not calculated on an individual basis.

The plaintiff in the case in question ran a cinema and would pay some of the employees a bonus for working nights and on Sundays. This was paid as a lump sum in addition to the basic wage and not calculated on an individual basis according to the amount of work involved, with the lump sum treated as tax exempt for payroll accounting purposes.

However, this was challenged by the tax office under whose jurisdiction the plaintiff fell. The tax office started from the assumption that tax was due on the bonuses and found that the conditions for tax exemption had not been met because the bonuses had been awarded on a flat-rate basis rather than individually according to the amount of work involved.

This was in turn challenged by the cinema operator, arguing that the way in which the flat-rate bonuses were calculated complied with the terms of Section 3(b) of the German Income Tax Act (Einkommensteuergesetz, EStG). The plaintiff pointed out that the flat-rate bonuses were actually smaller than would have been the case had they been calculated individually, and that the difference between these amounts was reported separately as unused bonuses.

The lawsuit was dismissed by the FG Düsseldorf, which found that the conditions set out in Section 3(b) EStG had not been met. The court affirmed that the plaintiff needed to have calculated the bonuses paid for working nights and on Sundays on an individual basis; merely performing a control calculation was not enough. The bonuses were deemed by the court to have been paid on a flat-rate basis without regard for the work that had actually been performed.

Lawyers with experience in the field of tax law can serve as advisors if disputes arise with the tax authorities.

For more information:

https://www.mtrlegal.com/en/legal-advice/tax-law/tax-dispute.html

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PressemitteilungenSteuerstreit
news-336 Mon, 26 Apr 2021 09:39:47 +0200 Indications of origin: Black Forest ham need not be sliced in the Black Forest https://www.mtrlegal.com/en/news-and-press/detail/news/indications-of-origin-black-forest-ham-need-not-be-sliced-in-the-black-forest.html Black Forest ham (Schwarzwälder Schinken) may be referred to as such even if it is not sliced and packaged in the Black Forest. That was the verdict of the Bundesgerichtshof (BGH), Germany’s Federal Supreme Court (Az.: I ZB 72/19).

Geographical indications of origin can be protected in a similar manner to trademarks, something which can prove to be particularly important because of consumers associating a certain level of quality with a product’s geographical origin in some instances. We at the commercial law firm MTR Rechtsanwälte note, however, that it is disputed whether the protection afforded to a geographical indication of origin applies to all stages of production or the further processing of the product.

In the case of Black Forest ham, the BGH ruled in a recently published judgment from September 3, 2020 that it can be referred to as such even if it is not sliced and packaged in the Schwarzwald.

The case was part of a long-running legal dispute. The term “Schwarzwälder Schinken” has been protected since as early as 1997. In 2005, an association set up to protect the interests of Black Forest ham producers – the Schutzverband der Schwarzwälder Schinkenhersteller – wished to expand upon this protection in response to ham being increasingly sold in slices rather than in one piece. The association took the view that it should be a requirement to establish that the commercial slicing and packaging of the ham also took place in the Black Forest in order for someone to be able to use the protected term “Schwarzwälder Schinken”.

The European Court of Justice had already expressed its concerns on the matter, opining that while a ban on further processing outside the relevant geographical area can be justified, it needs to be a necessary and proportionate measure in order to maintain the quality of the product or guarantee its origin. The court noted, however, that the decision whether or not to allow Black Forest ham to be further processed outside of the Black Forest needs to be taken by German courts.

The Bundespatentgericht – Germany’s Federal Patent Court – subsequently ruled that Black Forest ham does not need to be sliced in the Black Forest, with this decision having since been upheld by the Bundesgerichtshof.

The BGH held that expanding the protection of the geographical indication of origin was necessary neither on grounds of quality assurance nor ensuring the effectiveness of inspections, noting that checks examining whether ham slices are no more than 1.3 millimeters thick and whether the cutting equipment is being properly cleaned can also be conducted outside the Black Forest, as this does not require product-specific know-how.

Lawyers with experience in the field of IP law can provide counsel on issues pertaining to copyright law and trademark law.

For more information:

https://www.mtrlegal.com/en/legal-advice/ip-law/trademark-law.html

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MarkenrechtPressemitteilungen
news-334 Tue, 20 Apr 2021 12:41:18 +0200 LAG Düsseldorf: Short-time workers on zero hours do not accumulate vacation leave https://www.mtrlegal.com/en/news-and-press/detail/news/lag-duesseldorf-short-time-workers-on-zero-hours-do-not-accumulate-vacation-leave.html Short-time working – Kurzarbeit in German – refers to a government scheme that allows businesses experiencing economic difficulties to temporarily reduce their employees’ working hours, with the state making up for all or part of the lost wages. Many firms have had recourse to this program for reasons related to COVID-19. The Landesarbeitsgericht (LAG) Düsseldorf – the Regional Labor Court of Düsseldorf – has now ruled that short-time work also entails a reduced entitlement to vacation leave (Az. 6 Sa 824/20).

A lot of firms have implemented short-time working in response to the coronavirus pandemic, with it being possible to reduce working hours to different degrees. We at the commercial law firm MTR Rechtsanwälte can report that, according to a ruling of the Landesarbeitsgericht Düsseldorf from March 12, 2021, in cases where work is suspended altogether – referred to as Kurzarbeit null (zero hours) – the employee does not accumulate entitlement to vacation leave during this period.

The lawsuit was filed by a saleswoman who found herself repeatedly in short-time work due to the coronavirus pandemic, at one point working zero hours continuously for a period of three months, with the employer reducing the entitlement to vacation leave for this period on a pro rata basis.

The saleswoman took action against this, arguing that she was entitled to the full vacation leave because short-time work had not been implemented at her request and did not constitute time off, as she was required, for instance, to comply with reporting obligations and remain on standby. In other words, she was not free to do as she pleased with the time.

Her lawsuit was unsuccessful before the LAG Düsseldorf, which found that she had not accumulated any entitlement to vacation leave under the German Federal Leave Act (Bundesurlaubsgesetz) for the period she was working zero hours. The court held that while vacations are meant to provide workers with time to rest and relax, this also presupposes an obligation to actually perform work. Both parties’ obligations of performance were deemed to have been suspended during the period of short-time work. The court therefore ruled that the entitlement to vacation leave be reduced on a pro rata basis for each full month of short-time work.

The LAG Düsseldorf considers this outcome to be line with European law, noting that workers do not accrue an entitlement to the minimum annual leave in Europe during periods of short-time work according to the case-law of the ECJ. The court went on to state that there are no provisions under German law that provide more favorable conditions to workers, remarking in particular that short-time work is not comparable to being unable to work and that there have been no changes to the rules in the wake of the coronavirus pandemic.

It remains to be seen whether the ruling will stand. The LAG Düsseldorf has granted leave to appeal to the Bundesarbeitsgericht, Germany’s Federal Labor Court.

Experienced lawyers can advise on issues relating to short-time work, vacation leave, as well as other matters that fall within the ambit of labor and employment law.

For more information:

https://www.mtrlegal.com/en/legal-advice/employment-law/coronavirus-and-short-time-work.html

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Corona und KurzarbeitPressemitteilungen
news-330 Thu, 15 Apr 2021 13:14:00 +0200 Greensill Bank: Customers unable to access their money – BaFin orders moratorium https://www.mtrlegal.com/en/news-and-press/detail/news/greensill-bank-customers-unable-to-access-their-money-bafin-orders-moratorium.html The Bundesanstalt für Finanzdienstleistungsaufischt (BaFin) – Germany’s Federal Financial Supervisory Authority – has closed down Greensill Bank’s business operations with its customers and filed criminal charges. Private investors as well as institutional investors and municipalities fear losing their money at the bank.

Greensill Bank was acquired by the British-Australian financial conglomerate Greensill Capital in 2014, with the parent company currently experiencing serious economic difficulties. According to media reports, an application for bankruptcy protection has already been submitted a few days ago in Australia and preparations are being made to file for insolvency in the UK, with the problems having now also reached Greensill Bank in Bremen.

Faced with the threat of over-indebtedness, the BaFin has closed down the bank’s business operations with its customers and ordered a moratorium. We at the commercial law firm MTR Rechtsanwälte can report that the bank can no longer pay out money to customers and is only allowed to accept payments if they are intended for settling debts with the bank.

One of the key focuses of the bank was the financing of supply chains, though it also offered attractive investment conditions to private investors as well as institutional investors and municipalities. The accounts have now been frozen and customers are unable to access their money.

Also of concern is that a forensic special investigation conducted by the BaFin revealed accounting irregularities. According to the BaFin, the bank failed to produce evidence to support the existence of receivables on its balance sheet, leading the supervisory authority to file criminal charges with the Bremen public prosecutor’s office.

On a rare positive note, each customer’s deposits are protected up to a value of 100,000 euros under the terms of the German Deposit Guarantee Act (Einlagensicherungsgesetz, EinSiG). Compensation will not be forthcoming, however, until the BaFin has determined that it is payable, which has not happened to date.

There is also the possibility of further payments under the deposit protection fund (Einlagensicherungsfonds) of the Association of German Banks (Bundesverband Deutscher Banken), though these would primarily benefit private investors, potentially leaving institutional investors and municipalities empty handed.

Accounting irregularities and criminal charges notwithstanding, customers and investors of Greensill Bank should waste no time in examining and exhausting every legal avenue available to them in order to protect themselves from the threat of financial losses.

For more information:

https://www.mtrlegal.com/en/legal-advice/banking-law.html

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BankrechtPressemitteilungen
news-327 Mon, 12 Apr 2021 13:23:24 +0200 BaFin determines that compensation is payable to depositors of insolvent Greensill Bank https://www.mtrlegal.com/en/news-and-press/detail/news/bafin-determines-that-compensation-is-payable-to-depositors-of-insolvent-greensill-bank.html As was to be expected, the Bundesanstalt für Finanzdienstleistungsaufischt (BaFin) – Germany’s Federal Financial Supervisory Authority – has determined that compensation is payable to Greensill Bank’s depositors, as the bank is no longer able to repay all of its customers’ deposits. Insolvency proceedings have also been initiated against the bank with the Amtsgericht Bremen, the District Court of Bremen (508 IN 6/21).

After ordering a moratorium on Greensill Bank and freezing the accounts, it was to be expected that the BaFin would file a bankruptcy petition for the bank and determine that compensation is payable to the bank’s depositors. This has since come to pass.

The bank’s private customers can now breathe a sigh of relief, since their deposits are protected up to a value of 100,000 euros under the German Deposit Guarantee Act (Einlagensicherungsgesetz, EinSiG). With the BaFin having determined that compensation is payable, payments can now be arranged to this end. We at the commercial law firm MTR Rechtsanwälte can report that there is also the possibility of additional payments under the deposit protection fund (Einlagensicherungsfonds) of the Association of German Banks (Bundesverband Deutscher Banken).

Yet by no means are all customers in the clear, as not all of them are protected under the terms of the Deposit Guarantee Act. The funds at risk include the deposits of public bodies such as municipalities, as well as the deposits of insurance and reinsurance companies and pension funds.

They now have until May 14, 2021 to register their claims in due form and time in the insolvency schedule. While it is currently not possible to estimate how large the insolvency dividend will be, the creditors should expect significant financial losses. Moreover, the insolvency proceedings may drag on for a number of years.

Customers of Greensill Bank whose deposits are not protected under the Deposit Guarantee Act or who come up against difficulties receiving compensation pay-outs can take further legal action to prevent financial losses.

One option is to have someone look into the possibility of asserting claims for damages. Parties against whom these potential claims may be asserted include the auditors who issued Greensill Bank its audit certificate, or individuals in positions of responsibility at the bank. It should be noted here that the BaFin’s investigations revealed accounting irregularities and the bank was unable to provide evidence indicating receivables on the balance sheet. The BaFin has filed criminal charges with the Bremen public prosecutor’s office.

Lawyers with experience in the field of banking law can advise customers of Greensill Bank who have been affected.

For more information:

https://www.mtrlegal.com/en/legal-advice/banking-law.html

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BankrechtPressemitteilungen
news-326 Thu, 08 Apr 2021 17:09:52 +0200 LG Berlin overturns fine for GDPR violation https://www.mtrlegal.com/en/news-and-press/detail/news/lg-berlin-overturns-fine-for-gdpr-violation.html In a remarkable ruling from February 18, 2021, the Landgericht (LG) Berlin – the Regional Court of Berlin – declared a million-euro fine imposed in response to a breach of the General Data Protection Regulation (GDPR) invalid.

We at the commercial law firm MTR Rechtsanwälte note that the extent to which companies or legal persons can be issued with a fine for data protection breaches is a contentious legal issue. The Landgericht Berlin has now taken a position on the matter in a judgment from February 18, 2021, making it clear that fines cannot be imposed on legal persons, Az.: (526 OWi LG) 212 Js-OWi 1/20 (1/20).

At the heart of this judgment is a fine of 14.5 million euros that was imposed by Berlin’s Commissioner for Data Protection and Freedom of Information on a real estate company for violating the provisions of the GDPR in the fall of 2019, with the Commissioner citing inadequate data protection standards regarding the retention of tenants’ personal data.

The LG Berlin subsequently overturned this fine, ruling that a legal person cannot be the subject of fine proceedings. This includes cases involving violations of GDPR provisions. The court held that only natural persons can be charged for committing an infringement, and the person in question must be a governing body within the company, a shareholder authorized to represent the company, or some other person in a managerial role, with only the conduct of the legal person’s officers and representatives capable of being attributed to the legal person.

This means that it is necessary to produce evidence proving that the infringement was committed by a person in a position of responsibility within the business before a fine can be imposed against the company for breaching the provisions of the GDPR. The court held that the data protection authority had failed to provide evidence proving that a person in a position of responsibility was in fact personally responsible and to conduct appropriate investigations. Accordingly, the fine was found to be invalid.

The ruling is not yet final. Berlin’s Commissioner for Data Protection and Freedom of Information has since lodged an appeal, arguing that the decision is not consistent with European law. It remains to be seen how the appeal court will rule on the matter.

Businesses ought to prepare themselves for data protection authorities increasingly looking into the personal misconduct of persons in positions of responsibility going forward. Experienced lawyers can advise on data protection issues.

For more information:

www.mtrlegal.com/en/legal-advice/it-law.html

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IT-RechtPressemitteilungen
news-323 Tue, 06 Apr 2021 11:31:01 +0200 COVID-19: Provider of business closure insurance to pay out around 760,000 euros for closed bars https://www.mtrlegal.com/en/news-and-press/detail/news/covid-19-provider-of-business-closure-insurance-to-pay-out-around-760000-euros-for-closed-bars.html In a ruling from February 19, 2021, the Landgericht (LG) Düsseldorf – the Regional Court of Düsseldorf – held that the provider of business closure insurance has to pay out for bars closing in connection with the coronavirus (Az.: 40 O 53/20).

The case-law concerning the obligation of a provider of business closure insurance to indemnify in response to the coronavirus lockdown is not consistent. The Landgericht Düsseldorf has now given its verdict on the matter, ruling in favor of the policyholder. We at the commercial law firm MTR Rechtsanwälte can report that an insurance company has been made to pay out on a business closure insurance policy, with two bar operators set to receive more than 760,000 euros.

The two plaintiffs in the case run three bars in Düsseldorf’s Altstadt (“old town”). They were required by a decision of general application adopted by the state capital to close the bars due to the coronavirus pandemic. They had taken out business closure insurance for the bars as far back as 2017 and 2018. Yet, despite the forced closure of the bars during the first coronavirus lockdown, the insurer did not wish to pay out for the loss of revenue. It argued that the policy only covered illnesses that were explicitly listed in the German Infection Diseases Protection Act (Infektionsschutzgesetz, IfSG) at the time the bars were closed, noting that the legislation did not mention COVID-19 at that time.

The bar operators’ lawsuit demanding a payout on the insurance was successful. The LG Düsseldorf affirmed the insurance cover for the three bars, ruling that the insurer would have to pay out around 760,000 euros altogether.

The court held that the bars had been required to close from March 18, 2020 in response to a decision of general application adopted by the City of Düsseldorf, and that their closure had given rise to an insurance claim. Moreover, the approved alternative of pursuing takeaway business was not part of the bars’ core business model, with the court finding that this option was not economically feasible and need not have been implemented by the bars’ operators.

The LG Düsseldorf concluded that the insurance did in fact cover the instant case, even though the coronavirus had, of course, not yet been listed in the Infektionsschutzgesetz at the time the decision of general application was adopted on March 18, 2020. The clause in the insurance terms limiting insurance claims to those citing the pathogens explicitly mentioned in the old IfSG legislation was said to place the policyholder at an unreasonable disadvantage, and it was therefore found to be invalid under the terms of section 307 of the German Civil Code (Bundesgesetzbuch, BGB). The judgment may yet be subject to an appeal.

The courts have arrived at different conclusions regarding the obligation of a provider of business closure insurance to indemnify. Experienced lawyers can provide counsel in connection with legal disputes with insurers.

For more information:

https://www.mtrlegal.com/en/legal-advice/corona.html

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CoronaPressemitteilungen
news-318 Thu, 11 Mar 2021 22:37:00 +0100 FG Düsseldorf: A foreclosure sale is a private sales transaction https://www.mtrlegal.com/en/news-and-press/detail/news/fg-duesseldorf-a-foreclosure-sale-is-a-private-sales-transaction.html Unlike in the case of eminent domain, the foreclosure of a property may constitute a private sales transaction. That was the verdict of the Finanzgericht (FG) Düsseldorf, the Fiscal Court of Düsseldorf (Az.: 2 V 2664/20 A (E)).

It can be a very bitter experience for the property owner. We at the commercial law firm MTR Rechtsanwälte can report that – unlike in the case of eminent domain – when a property goes under the hammer and becomes the subject of a foreclosure sale, the profit is subject to taxation. That was the verdict of the Finanzgericht Düsseldorf in proceedings for interim relief. In a ruling from November 26, 2020, the court held that the transfer of ownership by way of a foreclosure sale may constitute a private sales transaction within the meaning of section 23 of the German Income Tax Act (Einkommensteuergesetz, EStG).

The case in question concerned two properties owned by the claimant that became the subject of a foreclosure sale in 2019. Both properties had likewise been acquired by the claimant in the context of a foreclosure sale.

The competent tax office viewed the foreclosure of both properties as representing two private sales transactions and taxed them as miscellaneous income. The claimant brought a legal action against this, arguing that, as in the case of eminent domain, a foreclosure sale is not predicated on a freely made decision of the owner. Accordingly, a foreclosure sale does not constitute a private sales transaction within the meaning of the EStG. The claimant also reasoned that the calculation of the ten-year time period should not be based on the point at which the highest bid was made but rather on the date the bid was accepted, which the claimant emphasized is an event that occurs later, after the ten-year period has expired.

The FG Düsseldorf did not follow this line of reasoning, ruling instead that a foreclosure sale is in fact predicated on a freely made decision of the owner. The court noted that, unlike in the case of eminent domain, the owner is able to prevent the foreclosure by satisfying the creditors’ claims. Whether this is actually economically possible was said to be immaterial.

The FG Düsseldorf went on to state that the sale of the properties had occurred within a period of ten years post-acquisition. It found that for the purposes of calculating the time period pursuant to section 23 EStG, the material event is the compulsory legal transaction, and that, in the case of a foreclosure sale, this occurs when the highest bid is made. The court clarified that the subsequent acceptance of the bid is merely the act that effects the legal transfer of ownership.

Lawyers with experience in the field of tax law can provide counsel in the event of legal disputes with the tax authorities.

For more information:

https://www.mtrlegal.com/en/legal-advice/tax-law/tax-dispute.html

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PressemitteilungenSteuerstreit
news-310 Tue, 09 Mar 2021 09:44:00 +0100 Exchange of financial information with Turkey delayed – Submit a voluntary declaration now https://www.mtrlegal.com/en/news-and-press/detail/news/exchange-of-financial-information-with-turkey-delayed-submit-a-voluntary-declaration-now.html As part of efforts to combat cross-border tax evasion, it appears that Turkey has yet to provide Germany with any financial information. This means that the individuals concerned still have the opportunity to submit a voluntary declaration.

There are now more than 100 countries participating in the automatic exchange of (financial) information (AEOI), including one of the more recent signatories, Turkey. The plan was for the financial information of individuals living in Germany with an account in Turkey to be reported to the German tax authorities by the end of 2020. Yet, according to media sources, this information has not been forthcoming to date. We at the commercial law firm MTR Rechtsanwälte note that this means individuals who are liable to pay tax in Germany and who have untaxed income located in an account in Turkey are still able to submit a voluntary declaration for tax evasion.

The details transmitted as part of the automatic exchange of information include the taxpayer’s name, address, birthday, account number, and tax identification number. The account balance as well as any income from capital is also disclosed to the tax authorities. This allows the authorities to check whether any tax that is due on the income has in fact been duly paid, or whether illicit earnings are being harbored in foreign accounts.

The reasons behind Turkey’s failure to date to transfer the information to Germany as planned are unknown. However, the issue is not whether Turkey will transfer the financial information to the German tax authorities but when this will occur. Taxpayers living in Germany who have untaxed income deposited in accounts in Turkey can still use this time to submit a voluntary declaration for tax evasion in order to obtain an exemption from punishment.

That being said, those concerned should not delay taking action any longer. Voluntary disclosure can only lead to an exemption from punishment if the declaration is submitted on time, i.e. before the tax evasion is discovered by the authorities. The declaration also needs to be complete and include all the information from the previous ten years that is relevant from a tax perspective.

This can quickly prove to be too much for a layperson to handle, with even minor errors resulting in a failure to obtain an exemption from punishment and instead giving rise to a fine or custodial sentence.

Your best bet is to turn to lawyers with experience in the field of tax law who know what information needs to be included in the voluntary declaration for it to be capable of leading to an exemption from punishment.

https://www.mtrlegal.com/en/legal-advice/tax-law/voluntary-disclosure.html

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SelbstanzeigePressemitteilungen
news-308 Mon, 08 Mar 2021 09:00:00 +0100 BGH: No guidance on right of withdrawal means realtor not entitled to commission https://www.mtrlegal.com/en/news-and-press/detail/news/bgh-no-guidance-on-right-of-withdrawal-means-realtor-not-entitled-to-commission.html According to a ruling of the Bundesgerichtshof (BGH) – Germany’s Federal Supreme Court – property buyers can potentially reclaim the commission they paid to the real estate agent if the latter fails to inform them about their right of withdrawal and provides no guidance on the issue.

In a judgment from November 26, 2020, the Bundesgerichtshof paved the way for many property buyers and sellers to rescind the brokerage agreement with their real estate agent (Az.: I ZR 169/19). We at the commercial law firm MTR Rechtsanwälte note that in order to exercise this right of withdrawal, the agreement must not have been concluded at the real estate agent’s business premises and they must not have handed over guidance to the client concerning the latter’s right of withdrawal. Assuming these conditions are met, it is possible to rescind the agreement within a period of 12 months and 14 days, with the result that the realtor is then no longer entitled to receive commission.

The defendants in the case before the BGH had concluded a contract for the sale of their house with a real estate agent at their residence. The sellers also signed a separate notice featuring guidance on their right of withdrawal, with this indicating that the enclosed sample withdrawal form could be used to rescind the agreement. However, no such form was provided by the realtor.

Following the sale of the property, the sellers refused to pay the brokerage fee and declared their withdrawal from the agreement. As was the case before the courts of lower instance, the lawsuit filed by the real estate agent was also unsuccessful before the BGH.

The court held that consumers have a right of withdrawal from agreements which are not concluded at the contractor’s business premises. The withdrawal period is 14 days, and the right of withdrawal expires no later than 12 months and 14 days after the agreement was concluded. However, the withdrawal period does not begin until the consumer has been informed about their right of withdrawal. In the case of agreements concluded away from business premises, the BGH stated that the contractor must make the relevant information available to the consumer on paper or – provided the consumer gives their consent – via another durable medium. Since this did not happen in the case in question, the withdrawal period had not begun.

According to the ruling delivered by the BGH, the information regarding the right of withdrawal in cases involving agreements concluded away from business premises must be made available to consumers in paper form or – provided the consumer gives their consent – via another durable medium, i.e., it must be physically presented to them. A mere acknowledgment is not enough. A real estate agent who fails to appropriately inform their clients about their right of withdrawal may lose their right to receive commission.

https://www.mtrlegal.com/en/legal-advice/real-estate-and-property-law.html

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PressemitteilungenImmobilienrecht
news-304 Thu, 04 Mar 2021 21:20:26 +0100 OLG Dresden – Commercial rent reduction a legitimate response to COVID-19 https://www.mtrlegal.com/en/news-and-press/detail/news/olg-dresden-commercial-rent-reduction-a-legitimate-response-to-covid-19.html A retailer is allowed to lower the net rent (exclusive of heating, lighting and other service costs) by 50 percent on account of its store having to close due to COVID-19. That was the verdict of the Oberlandesgericht (OLG) Dresden – the Higher Regional Court of Dresden – in a ruling from February 24, 2021 (Az.: 5 U 1782/20).

Retailers and other businesses are being hit hard by the lockdown during the ongoing pandemic, with those affected experiencing a drop in income but no such change in terms of costs such as rent. For this reason, Germany’s federal government sought to clarify at the end of 2020 that the mandatory closure of a store due to the coronavirus pandemic may amount to frustration of contract based on an undermining of its commercial basis, and that commercial rents can potentially be lowered. We at the commercial law firm MTR Rechtsanwälte can report that the relevant regulations came into force on December 31, 2020.

It is these revised arrangements that informed the OLG Dresden’s decision. The case in question concerned a retailer that was forced to close its textile shop due to the lockdown measures in place from March 19 to April 19 of 2020. The company refused to pay its commercial rent for the month of April, reasoning that the rented property was defective because of the compulsory closure of the store. The retailer submitted, in the alternative, that a transfer of use was impossible, also arguing for a reduction in rent due to frustration of contract based on an undermining of its commercial basis.

The regional court did not follow this line of reasoning, ruling instead that the retailer was required to pay the entirety of the outstanding rent. The OLG Dresden, on the other hand, came to a different conclusion after hearing the case on appeal, partially overturning the lower court’s judgment. It held that the government-mandated closure of the store in response to the coronavirus pandemic had resulted in a frustration of contract within the meaning of section 313(1) of the German Civil Code (Bürgerliches Gesetzbuch, BGB). Accordingly, the rent was due an adjustment and could be lowered.

The OLG considered a 50 percent reduction in the net rent for the duration of the closure to be justified. Since neither party was responsible for – nor could they have foreseen – the frustration of the contract’s commercial basis, the court deemed it fair and proportionate for both parties to bear an equal share of the burden.

While the bargaining position of commercial tenants has improved thanks to the regulations introduced by Germany’s federal government, whether and to what extent commercial rents can be lowered in response to a compulsory closure depends on the facts and circumstances of a given case. Experienced attorneys can provide counsel on legal issues relating to the coronavirus pandemic.

For more information:

https://www.mtrlegal.com/en/legal-advice/real-estate-and-property-law/commercial-law-of-tenancy-and-lease/corona-and-commercial-tenancy-law.html

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Corona und gewerbliches MietrechtPressemitteilungen
news-300 Fri, 26 Feb 2021 13:02:17 +0100 Bundeskartellamt imposes million-euro fines in response to illegal arrangements https://www.mtrlegal.com/en/news-and-press/detail/news/bundeskartellamt-imposes-million-euro-fines-in-response-to-illegal-arrangements.html The Bundeskartellamt – Germany’s Federal Cartel Office – has imposed fines totaling approx. 175 million euros on five aluminum forging companies and ten employees responsible for engaging in anticompetitive arrangements.

The Bundeskartellamt announced on December 23, 2020 that senior staff members of the relevant companies had, over a period of years, been exchanging information on cost factors and encouraging one another to pass on rising costs directly to their customers. We at the commercial law firm MTR Rechtsanwälte note that arrangements of this kind are prohibited because they restrict competition.

The investigations by the Bundeskartellamt were triggered by a leniency application submitted by one of the firms involved, with the company in question emerging from the process without being fined thanks to the leniency program.

According to the findings of the Bundeskartellamt, representatives of the aluminum forging companies regularly met from 2006 to 2018, though not all the forging companies were involved throughout the entirety of this period. There was a broad consensus among the companies that increases in procurement costs would be passed on directly to their customers. To this end, the parties exchanged information about their respective purchasing costs for aluminum, as well as energy costs and processing costs. They also agreed on how the cost increases could be passed on to customers.

The companies’ representatives further agreed not to account for procurement costs and to only consider the added value when calculating customer discounts referred to as “ratio” by the parties involved, with these typically being agreed at the beginning of a supply relationship. The forging companies’ customers include manufacturers and suppliers in the automotive industry.

In setting the fines, the Bundeskartellamt took into account the fact that two companies supported and cooperated with the investigations. Together with another one of the forging companies, they admitted to the charges as part of an amicable conclusion to the proceedings.

The Bundeskartellamt’s fining decisions may yet be the subject of an appeal.

The illegal arrangements entered into by the parties involved restricted competition and violated antitrust law. However, violations of antitrust law are by no means always as blatant as was the case here. Individual contractual clauses can themselves often give rise to a violation and thus severe penalties.

Lawyers with experience in the field of antitrust and competition law can serve as advisors.

For more information:

https://www.mtrlegal.com/en/legal-advice/antitrust-law.html

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KartellrechtPressemitteilungen
news-297 Tue, 23 Feb 2021 21:08:00 +0100 Distributing FFP2 masks free of charge in breach of competition law https://www.mtrlegal.com/en/news-and-press/detail/news/distributing-ffp2-masks-free-of-charge-in-breach-of-competition-law.html Groups deemed to be at risk can redeem vouchers for FFP2 masks. Pharmacies that waive the two-euro personal contribution are violating competition law according to a ruling of the Landgericht (LG) Düsseldorf – the Regional Court of Düsseldorf.

In order to protect those at particular risk against being infected with the coronavirus, the German parliament has adopted legislation (Coronavirus-Schutzmasken-Verordnung, SchutzmV) that provides for and regulates the distribution of FFP2 masks by pharmacies to the most vulnerable people. The country’s health insurance funds have sent vouchers for FFP2 masks to their insured members, which the latter can redeem in pharmacies. In return for a personal contribution of two euros they receive six masks.

Some pharmacies have advertised that they are waiving payment of the personal contribution and offering the FFP2 masks to those at risk completely free of charge. They need to tread carefully. We at the commercial law firm MTR Rechtsanwälte note that waiving the personal contribution, as well as similar discount initiatives, may amount to a breach of competition law.

That was certainly the verdict of the LG Düsseldorf in an expedited hearing from January 15, 2021, which resulted in one such discount initiative being banned (Az.: 34 O 4/21). The lawsuit was filed by a competition association against a pharmacy holding company that was promoting its affiliated pharmacies with reference to waiving the personal contribution.

In its reasoning, the LG Düsseldorf held that the provisions of the SchutzmV concerned with the personal contribution ought to be viewed as a regulation governing market behavior, and that failure to comply with this regulation thus amounts to an anticompetitive infringement.

The court went on to state that the purpose of the legislation is to ensure that FFP2 masks are distributed in a consistent and appropriate manner in order to protect particularly vulnerable groups of people against being infected with the coronavirus, noting that this is the reason why the masks ought to be used sensibly and not wastefully. The FFP2 masks were said by the court to be intended for those who really need them and who are prepared to pay the personal contribution of two euros.

While the ruling is not yet final, it has already sent an important signal. Violations of competition law may be met with severe penalties. Heavy fines are a real possibility.

Lawyers with experience in the field of antitrust and competition law can serve as advisors.

For more information:

https://www.mtrlegal.com/en/legal-advice/competition-law.html

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PressemitteilungenWettbewerbsrecht
news-293 Tue, 16 Feb 2021 13:58:46 +0100 BGH: D&O insurer liable for payments made after the onset of insolvency https://www.mtrlegal.com/en/news-and-press/detail/news/bgh-do-insurer-liable-for-payments-made-after-the-onset-of-insolvency.html The insurer behind a D&O policy is liable for payments made after the onset of insolvency. That was the verdict of the Bundesgerichtshof (BGH) – Germany’s Federal Supreme Court – in a judgment from November 18, 2020 (Az.: IV ZR 217/19).

A managing director is personally liable for any payments they arrange after the company is already insolvent, with the insolvency administrator able to reclaim the relevant amounts from them. This could threaten the managing director’s livelihood. The ruling in question by the BGH affords managing directors greater security by providing that the insurer must pay out on the D&O policy in such cases.

Whether the insurer behind a D&O policy is obliged to pay in cases of this kind has been a contentious issue to date. For instance, in a judgment from June 20, 2018, the OLG Düsseldorf – the Higher Regional Court of Düsseldorf – ruled that the insurer is not liable for payments arranged by the insured managing director after the company became insolvent (Az.: I-4 U 93/16). The court found that cases like this do not give rise to a liability claim for damages within the meaning of the terms and conditions of the insurance policy, but rather a claim for compensation sui generis.

However, the BGH took a different view, ruling that the company’s right under section 64 of the German Limited Liability Companies Act (Gesetz betreffend die Gesellschaften mit beschränkter Haftung, GmbHG) to compensation for payments made after the company becomes insolvent, or its over-indebtedness is established, amounts to a liability claim for damages.

In the instant case before the BGH, an insolvency administrator asserted claims against the insurer with whom the managing director had taken out a D&O insurance policy. The insurer did not wish to pay out, justifying this course of action with reference to the terms and conditions of the policy. This line of reasoning was not upheld by the BGH. The Karlsruhe judges held that the issue of whether or not the claims amounted to insured claims for damages was to be judged based on the perception of the average policyholder without specialist knowledge of insurance law.

The BGH went on to state that while the typical D&O policyholder is versed in business and familiar with general terms and conditions, their interpretation of the relevant clause and their understanding of the purpose behind the policy would lead them to view the rights arising from sentence 1 of section 64 GmbHG as an entitlement to claim damages within the meaning of the terms and conditions of the policy. The court noted that said individual would construe the clause as meaning that the insurance would cover any financial losses.

Lawyers with experience in the field of company law can advise on matters pertaining to D&O insurance.

For more information:

https://www.mtrlegal.com/en/legal-advice/company-law.html

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GesellschaftsrechtPressemitteilungen
news-290 Fri, 05 Feb 2021 08:18:49 +0100 BFH: Obtaining an expert opinion on purchase price allocation of land https://www.mtrlegal.com/en/news-and-press/detail/news/bfh-obtaining-an-expert-opinion-on-purchase-price-allocation-of-land.html In the event of a dispute between a taxpayer and the tax authorities regarding the allocation of the fair market value of land and buildings in real terms, the fiscal courts are required to obtain an expert opinion.

Appraisals of the fair market value of buildings and land in real terms are often contentious. While an allocation of the purchase price to land and buildings is common in cases involving a contract for the purchase of real estate, the tax authorities often do not go along with the outcome based on the assumption that the allocation does not reflect the economic reality but is instead aimed at securing tax benefits, with only the building portion being depreciable for wear and tear.

The tax authorities like to fall back on a working guide of the Bundesfinanzministerium – Germany’s Federal Ministry of Finance – when it comes to allocating the purchase price in these cases. Yet, according to a ruling of the Bundesfinanzhof (BFH) – Germany’s Federal Fiscal Court – from July 21, 2020 (Az.: IX R 26/19), this does not go far enough. We at the commercial law firm MTR Rechtsanwälte can report that, in the event of a disputed real estate appraisal, the relevant fiscal court is generally required to obtain the opinion of an expert for the purposes of land valuation.

The case before the BFH concerned a plaintiff who had acquired a rented condominium in a large city for the price of 110,000 euros in 2017. The purchase agreement stipulated that 20,000 euros of the purchase price was to be allocated to the land. While the buyer assumed for the purposes of wear and tear depreciation that the building portion made up 82 percent of this, the tax office took an entirely different view on the matter. It started from a mere 31 percent as its basis, with this determination having been informed by the Bundesfinanzministerium’s “Arbeitshilfe zur Aufteilung eines Gesamtkaufpreises für ein bebautes Grundstück (Kaufpreisaufteilung)” [Working Guide on the Allocation of the Total Purchase Price for a Developed Plot of Land (Purchase Price Allocation)]. The buyer’s lawsuit was unsuccessful before the fiscal court.

However, the BFH disagreed with the lower court’s assessment, ruling that the Bundesfinanzministerium’s working guide did not guarantee that the requested allocation proceed on the basis of the fair market value of land and buildings in real terms. The court held that this would reduce the valuation process to a mere asset value approach, neglecting other evaluation criteria such as local and regional factors. The BFH therefore concluded that it is generally necessary to obtain an expert opinion for the purposes of the assessment.

Lawyers with experience in the field of tax law can provide counsel in the event of tax disputes with the authorities.

For more information:

https://www.mtrlegal.com/en/legal-advice/tax-law/tax-dispute.html

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SteuerstreitPressemitteilungen
news-289 Wed, 03 Feb 2021 10:22:23 +0100 OLG Hamm on reporting illegality in e-commerce https://www.mtrlegal.com/en/news-and-press/detail/news/olg-hamm-on-reporting-illegality-in-e-commerce.html A company is not in breach of competition law if it reports illegality by a competitor on an online e-commerce platform and the allegations are true. That was the verdict of the Oberlandesgericht (OLG) Hamm – the Higher Regional Court of Hamm.

Antitrust infringements are a persistent feature of the e-commerce landscape. Large online platforms have for this reason put in place reporting systems for these kinds of violations, with offers being delisted when flagged accordingly. Of course, this is not meant to give rise to unwarranted complaints against competitors that hinder their business operations. We at the commercial law firm MTR Rechtsanwälte note that unwarranted complaints are contrary to the German Unfair Competition Act (Gesetz gegen den unlauteren Wettbewerb, UWG) and represent antitrust infringements in and of themselves.

The situation is different, however, if a company reports a rival business to the party operating a commercial platform in response to actual illegality. A ruling of the OLG Hamm from October 8, 2020 found that this does not constitute an anticompetitive infringement.

The plaintiff in the instant case sells lamps and lights via a large commercial platform online. It reported a violation on the part of a competitor that had failed to provide the necessary information regarding the energy efficiency class of lamps in relation to two offers. The online platform subsequently removed these and an additional ten offers by the party responding to the lawsuit from its listing. The latter then had the plaintiff issued with a formal warning, arguing that the complaint was unfair, amounted to an act of commercial aggression, libel, a concerted effort to hinder its business, and was in violation of the UWG. The plaintiff responded in kind with its own warning letter, demanding that the responding party refrain from continuing to advertise the lamps without the required labeling. Furthermore, it sought a declarative statement confirming that the responding party had no claims against it.

The plaintiff was successful both at first instance and in the appeal proceedings before the OLG Hamm, which found that the complaint submitted in relation to the online platform was justified and did not amount to an unfair business practice, and that the product labelling was in fact inaccurate. Thus, the complaint constituted neither an act of commercial aggression, nor libel, slander, or an obstruction.

Anyone considering reporting antitrust infringements to the party running an online platform ought to be sure that the allegations are true, as flagging another party without justification may backfire and give rise to formal warnings and damages claims.

Lawyers with experience in the fields of antitrust and competition law can serve as advisors.

For more information:

https://www.mtrlegal.com/en/legal-advice/competition-law.html

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WettbewerbsrechtPressemitteilungen
news-286 Tue, 02 Feb 2021 13:20:09 +0100 Automatic exchange of information with Turkey – Voluntary declaration for tax evasion https://www.mtrlegal.com/en/news-and-press/detail/news/automatic-exchange-of-information-with-turkey-voluntary-declaration-for-tax-evasion.html Turkey is the latest country to sign up to the automatic exchange of information as part of efforts to combat cross-border tax evasion. It is still possible to submit a voluntary declaration for tax evasion.

There are now more than 100 countries participating in the automatic exchange of (financial) information (AEOI). Former tax havens such as Switzerland, Austria, and Liechtenstein have already signed up, and Turkey is now following suit. The process involves countries committing to mutually exchange the banking information of taxpayers who reside in another country, making it increasingly difficult to conceal untaxed income from foreign accounts from the exchequer. We at the commercial law firm MTR Rechtsanwälte can report that this now applies to accounts in Turkey as well.

The information exchanged always relates to the previous year, which means information from the calendar year 2019 was exchanged in 2020. The transfer of data is normally supposed to take place by September 30. Due to the coronavirus pandemic, the participating countries have agreed that this year the transfer of data will not be required until December 31.

Turkey’s participation in the exchange of information is of great importance to the German tax authorities. They will receive the financial information of all taxpayers registered in Germany with an account in Turkey. The authorities are then able to examine whether taxes have been duly paid on the income deposited in the foreign account. Should they come across irregularities in doing so, this can quickly give way to accusations of tax evasion and the threat of commensurate sanctions.

Exemption from punishment is possible by submitting a voluntary declaration, though this has to occur before the tax evasion is discovered by the authorities. Since this year the data does not need to be transferred as part of the AEOI until December 31, the parties concerned can still take action before the tax evasion is discovered. That said, the voluntary declaration must not only be submitted in due time but also be exhaustive if it is to be capable of leading to an exemption from punishment.

These represent significant obstacles for a layperson, with even minor errors potentially resulting in the voluntary declaration failing to achieve the desired outcome. Those concerned should not turn to their tax office for answers to any questions, as voluntary disclosure may no longer be possible as a result.

The best course of action is to consult with lawyers with experience in the field of tax law. They are familiar with the requirements a voluntary declaration needs to fulfil in order for it to be able to lead to an exemption from punishment.

For more information:

https://www.mtrlegal.com/en/legal-advice/tax-law/voluntary-disclosure.html

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SelbstanzeigePressemitteilungen
news-284 Wed, 20 Jan 2021 09:37:20 +0100 LG München: No risk of confusing advertisements featuring maritime themes https://www.mtrlegal.com/en/news-and-press/detail/news/lg-muenchen-no-risk-of-confusing-advertisements-featuring-maritime-themes.html The Landgericht (LG) München – Regional Court of Munich – has ruled that consumers were not being misled by two manufacturers promoting their fish products using a captain, and that the advertisements in question therefore did not violate competition law.

A food manufacturer that had been promoting its fish products using a captain sporting a beard and cap for many years accused one of its competitors of having copied this promotional character, arguing that this amounted to misleading advertising because of its potential to confuse consumers. The Gesetz gegen den unlauteren Wettbewerb (UWG) – the German Unfair Competition Act – prohibits practices that deceive consumers as to the origin of a product.

We at the commercial law firm MTR Rechtsanwälte can report that, according to the ruling of the Landgericht München, the use of maritime themes is not in and of itself liable to mislead consumers and thus does not constitute a violation of competition law.

In its judgment from December 3, 2020 (Az.: 17 HK O 5744/20), the LG München held that it is only natural for fish products to be promoted using maritime themes such as the sea, coast, sky, and weather, and that this cannot be viewed as plagiarism of an advertising concept.

Furthermore, there were said to be clear differences between the advertisements, including with respect to the main character. The court found that while the plaintiff was promoting its products using a character that was recognizable as a captain, it was not possible to identify the protagonist featured in the advertising of the company responding to the lawsuit as a sailor. The court noted that the latter was not wearing a sailor’s outfit but was instead adorned with a tie and silk scarf. It further stated that the fact that this character by the sea was wearing a skipper cap did not in and of itself make him a sailor, noting that this style of cap is particularly worn a lot in northern Germany. The party responding to the lawsuit could not be prohibited per se from promoting its products using a mature man with a graying beard, particularly as the use of the term “Best Agern” [best agers] – a reference to consumers above the age of 50 – is currently extremely popular and widespread in advertising.

The LG München went on to point out that there were other significant differences between the commercials, and that the respective names and indications of origin were clearly visible. As such, the court concluded that there was no risk of consumers becoming confused.

Misleading advertising is contrary to competition law and accordingly may give rise to formal warnings or injunction suits. Lawyers with experience in the fields of antitrust and competition law can serve as advisors.

For more information:

 

https://www.mtrlegal.com/en/legal-advice/competition-law.html

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WettbewerbsrechtPressemitteilungen
news-282 Wed, 13 Jan 2021 11:55:19 +0100 FG Düsseldorf: Demolition of inherited family home may retrospectively give rise to estate tax https://www.mtrlegal.com/en/news-and-press/detail/news/fg-duesseldorf-demolition-of-inherited-family-home-may-retrospectively-give-rise-to-estate-tax.html The demolition of your parent’s home post-inheritance may lead to a retrospective loss of tax-exempt status. That was the verdict of the Finanzgericht (FG) Düsseldorf – the Fiscal Court of Düsseldorf – in a judgment from January 8, 2020 (Az.: 4 K 3120/18 Erb).

Children who inherit real estate from their parents can receive an exemption from estate tax even if they go over their personal tax allowance of 400,000 euros. We at the commercial law firm MTR Rechtsanwälte note that this is conditional on the heirs personally occupying the property for the next ten years and the living space not exceeding 200 square meters.

Heirs must nonetheless tread carefully if they decide to have the inherited family home demolished within this ten-year period, as this may result in estate tax being imposed retrospectively. That was the verdict of the Finanzgericht Düsseldorf in a recently published judgment from January 8, 2020. According to the ruling, the tax can be levied even if the house exhibits significant defects and was demolished for that reason.

The proceedings before the FG Düsseldorf concerned a daughter who had inherited her parent’s house in 2009. She went on to personally occupy the property for the next seven years, after which time it became increasingly difficult for her to reach her second-floor apartment and installing a stair lift did not seem appropriate given the poor structural condition of the house. She therefore ultimately decided to have the building demolished.

Since she had thus only personally occupied the inherited property for a mere seven years, the competent tax office subsequently demanded payment of estate tax. The heiress’s appeal against the tax assessment notice was unsuccessful.

The FG Düsseldorf held that the authorities were due retrospective payment of estate tax because the demolition of the house had occurred within the ten-year period. The court went on to state that even though the reasons for the demolition were understandable, no compelling reason had been presented given that personally occupying the property had still been a possibility.

Heirs should therefore tread carefully if they decide to give up the inherited family home within the ten-year period. In the absence of genuinely compelling grounds justifying this course of action, the tax authorities may come knocking at their door.

Lawyers with experience in the field of tax law can serve as advisors.

For more information:

https://www.mtrlegal.com/en/legal-advice/tax-law/inheritance-tax.html

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ErbschaftssteuerPressemitteilungen
news-280 Fri, 08 Jan 2021 09:58:02 +0100 COVID-19 – Rent reduction in response to lockdown https://www.mtrlegal.com/en/news-and-press/detail/news/covid-19-rent-reduction-in-response-to-lockdown.html The return to a state of lockdown has hit many businesses and entrepreneurs hard. Meanwhile, the courts are arriving at different conclusions regarding whether government-mandated business closures justify rent reductions.

The period in the run up to Christmas saw the metaphorical lights go out in a lot of pedestrian zones and at many businesses, many of which have had to close due to the latest lockdown in response to the coronavirus pandemic. While businesses have experienced a drop in income during what is typically a lucrative time of year in terms of sales, their overheads – e.g. in the form of rent payments for commercial premises – are still due as usual.

Section 536(1) of the German Civil Code (Bürgerliches Gesetzbuch, BGB) provides for the possibility of rent reduction if the rented property exhibits a defect that renders it unsuitable for use in the manner defined in the relevant contract. We at the commercial law firm MTR Rechtsanwälte can report that the courts have reached different conclusions to date on whether the government-ordered lockdown constitutes grounds for rent reduction.

The Landgericht (LG) Heidelberg – the Regional Court of Heidelberg – was one of the first courts to rule in a judgment from July 30, 2020 that the coronavirus lockdown does not amount to a defect in the rented property within the meaning of the legislation (Az.: 5 O 66/20). The court held that the landlord has a duty to maintain the rented property in a condition that allows it to be used in the manner defined in the relevant contract. The government order requiring the closure of businesses in order to limit the spread of the coronavirus has nothing to do with the state of the rented property. The LG Heidelberg ruled that the risk lies with the tenant, that there is no frustration of contract based on an undermining of its commercial basis, and that the tenant is not entitled to lower the rent.

The regional courts of Zweibrücken, Frankfurt, and Oldenburg delivered similar rulings.

However, the Landgericht München – the Regional Court of Munich – arrived at a different outcome in a judgment dated September 22, 2020, ruling that commercial tenants can seek a partial but also substantial reduction in rent where stores are forced to close because of government orders or where restrictions are put in place due to the coronavirus pandemic (Az.: 3 O 4495/20). It went on to say that, depending on the scope of the restrictions, the rent can be reduced by as much 80 percent.

That rent reduction ought to be possible is a view apparently shared by Germany’s federal government. Point 15 of the joint federal and state resolution (Bund-Länder-Beschluss) of December 13, 2020 concerned with implementing stricter coronavirus measures states that where commercial tenancy and lease contracts are affected by government measures related to COVID-19, the law assumes that significant restrictions on use resulting from the coronavirus pandemic may represent a serious change to the commercial basis of the contract. The idea behind this is to facilitate negotiations between commercial tenants and landlords.

Experienced lawyers can provide counsel on legal issues pertaining to the coronavirus pandemic.

For more information:

https://www.mtrlegal.com/en/legal-advice/real-estate-and-property-law/commercial-law-of-tenancy-and-lease/corona-and-commercial-tenancy-law.html

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Corona und gewerbliches MietrechtPressemitteilungen
news-279 Tue, 05 Jan 2021 15:42:27 +0100 Transfer of shares from company to private hands not an acquisition https://www.mtrlegal.com/en/news-and-press/detail/news/transfer-of-shares-from-company-to-private-hands-not-an-acquisition.html If shares that were acquired prior to 2009 are transferred from company to private hands and later sold, the profits are not to be treated as taxable income from capital investments according to the Finanzgericht (FG) Münster, the Fiscal Court of Münster.

On January 1, 2009, a flat rate withholding tax (Abgeltungssteuer) was introduced in Germany. A transfer of shares acquired prior to this cutoff date from company to private hands does not amount to an acquisition of shares. That was the verdict of the Finanzgericht Münster in a judgment from March 26, 2020 (Az.: 8 K 1192/18 F). We at the commercial law firm MTR Rechtsanwälte note that this in turn means that any future profits from the sale of such shares will not be treated as income from capital investments.

The plaintiff in the case in question was a GmbH & Co. KG – a type of German limited commercial partnership (KG) consisting of a general partner (GmbH) and a limited partner – that had acquired an equity stake in 2007. In 2011, the company brought an end to its commercial operations, declaring that it would cease trading and restrict its activities to asset management going forward. Ownership of the company’s assets, including the equity stake, was transferred to the shareholders on a pro rata basis. In 2014, the equity stake was sold. The capital gains were subsequently treated by the tax authorities as taxable profits from the investment of capital.

The plaintiff took legal action against this, arguing that because it had acquired the equity stake before the flat rate withholding tax came into force, the capital gains were not subject to taxation as per the statutory transitional arrangements. However, the tax office maintained that the transfer of the shares to private hands amounted to an acquisition.

The Finanzgericht Münster ruled in favor of the plaintiff, reasoning that while it is true that, pursuant to section 20(2) sent. 1 no. 1 of the German Income Tax Act (Einkommensteuergesetz, EStG) as amended on January 1, 2009, profits from the sale of shares are subject to taxation irrespective of the length of the retention period, according to the transitional provision this only applies to shares that were acquired after December 31, 2008. It provides that an acquisition is deemed to have taken place only if it occurs in connection with a change of legal entity. The FG Münster concluded that the cessation of commercial operations had not given rise to a change of legal entity in the instant case. This is not the final word on the matter; an appeal is pending before the Bundesfinanzhof, Germany’s Federal Fiscal Court (Az.: VIII R 12/20).

Lawyers with experience in the field of tax law can provide counsel in the event of tax disputes with the authorities.

For more information:

https://www.mtrlegal.com/en/legal-advice/tax-law/tax-dispute.html

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SteuerstreitPressemitteilungen
news-275 Tue, 22 Dec 2020 11:33:21 +0100 Obligation to file for insolvency only suspended in cases of over-indebtedness, not illiquidity https://www.mtrlegal.com/en/news-and-press/detail/news/obligation-to-file-for-insolvency-only-suspended-in-cases-of-over-indebtedness-not-illiquidity.html There has been a limited extension until December 31, 2020 to the suspension of the obligation to file for insolvency due to the coronavirus pandemic. However, this only applies to cases of over-indebtedness, not illiquidity.

To mitigate the effects of the coronavirus pandemic and prevent a wave of insolvencies, Germany’s federal government decided in March to suspend the obligation to file for insolvency until September 30, 2020. The measure has since been extended until the end of 2020 but with an important caveat that needs to be borne in mind: the suspension of the obligation to file for insolvency is now only applicable to cases of over-indebtedness. If, however, the party in question is already insolvent (illiquidity), we at the commercial law firm MTR Rechtsanwälte would stress the importance of filing for insolvency as soon possible.

A company is deemed to be illiquid if it is no longer able to meet its payment obligations as they fall due in the form of wages, salaries, invoices, and loans. In the case of over-indebtedness, the debts exceed the total value of the company. Because there is still hope with overindebted companies of permanently averting insolvency, the obligation to file for insolvency remains suspended in these instances. Companies that already find themselves unable to pay their debts are required to file for insolvency. According to the German government, this serves to maintain the necessary level of trust in business and commerce.

Suspension of the obligation to file for insolvency for overindebted companies remains conditional on there being a causal relationship between the coronavirus pandemic and the financial difficulties. Suspension buys companies more time to consolidate their businesses.

Board members and managing directors are nonetheless well advised to precisely document the negative impact of the pandemic – in the form of outstanding payments, cancelled orders, supply shortages, etc. – in order to be able to demonstrate that COVID-19 is the reason behind the over-indebtedness.

In addition, it needs to be confirmed that there is in fact no evidence of illiquidity. The impact of the pandemic might have already resulted in a number of companies experiencing significant liquidity problems. If illiquidity is already a reality, then the insolvency paperwork must be filed without delay. If there is still legitimate hope of being able to successfully address the grounds of insolvency, filing for insolvency can be put off for up to three weeks. It is nevertheless important to always bear in mind that it is potentially a criminal offense to delay filing for insolvency.

Lawyers with experience in the field of insolvency law can advise businesses.

For more information:

https://www.mtrlegal.com/en/legal-advice/company-law/restructuring-insolvency/corona-and-insolvency-law.html

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Corona und InsolvenzrechtPressemitteilungen
news-272 Fri, 18 Dec 2020 16:36:01 +0100 Law aimed at promoting fair competition passed https://www.mtrlegal.com/en/news-and-press/detail/news/law-aimed-at-promoting-fair-competition-passed.html The Bundestag and Bundesrat – Germany’s lower and upper houses of parliament respectively – have passed a law designed to promote fair competition, with the legislation expected to curb misuse of warning notices significantly.

The German government hopes that the law will ensure fair competition and curtail misuse of warning notices. To this end, the legislation provides for a reduction in financial incentives for parties seeking to obtain a warning notice, and at the same time raises the requirements for bringing such an action in the first place. It also sets out provisions that make it easier for the party on the receiving end of a warning notice to assert counterclaims. In addition, the choice of legal venue (variable place of jurisdiction) is to be restricted. We at the commercial law firm MTR Rechtsanwälte can also report that German design law will be expanded to include a repair clause.

The plans to promote fair competition include a reduction in financial incentives associated with warning notices. The legislation stipulates that competitors are not entitled to reimbursement of costs in connection with warning notices issued in response to violations of information and labeling requirements online, or violations of data protection law committed by businesses with less than 250 employees. Moreover, the extent of any contractual penalty in the case of a first warning is limited in these instances.

These changes are informed by the notion that warning notices should not be a business model. That is why only qualifying industry associations that meet certain conditions are now eligible to seek this form of redress. The legislation thus seeks to deprive disreputable or dubious industry associations of the commercial basis for misusing warning notices.

While this entails raising barriers for parties seeking to obtain written notices, it will be easier for those on the receiving end to defend themselves and expose misuse of written notices by referencing presumptive examples, including sending out mass warning notices or demanding excessive contractual penalties. Those who wrongfully receive a warning notice will also be entitled to reimbursement of the costs incurred in connection with legal representation. Parties seeking to obtain a written notice should therefore carefully examine whether their claim is justified lest it come back to bite them.

Furthermore, jurisdiction variability is to be limited. In cases involving legal infringements online and in e-commerce, the place of jurisdiction shall be the defendant’s legal venue.

An amendment has also been made to the German Act on the Legal Protection of Designs (Designgesetz, DesignG), which now features a repair clause. This opens up competition for visible replacements parts, something that may be of importance, for instance, in relation to automotive spare parts.

Lawyers with experience in the fields of antitrust and competition law can offer advice.

For more information:

https://www.mtrlegal.com/en/legal-advice/competition-law.html

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PressemitteilungenWettbewerbsrecht
news-269 Wed, 09 Dec 2020 11:58:12 +0100 Business closure due to COVID-19 – Claims against insurer successful https://www.mtrlegal.com/en/news-and-press/detail/news/business-closure-due-to-covid-19-claims-against-insurer-successful.html An insurer was forced to indemnify a Munich restaurant for its closure due to COVID-19. The owner’s claim was successful before the Landgericht (LG) München, the Regional Court of Munich (Az.: 12 O 5868/20).

First, restaurant owners, among others, were forced to close their premises in the spring because of the coronavirus pandemic. Then the insurance companies refused to cover the losses despite the restaurateurs having taken out business closure insurance. However, insurers’ hopes of an easy ride were dashed. We at the commercial law firm MTR Rechtsanwälte can report that the Landgericht München ruled once again on October 22, 2020 that the insurer was obliged to indemnify the policyholder. This follows a ruling of the LG München from October 1 in a similar case in which the insurance company was forced to pay substantial compensation to a restaurateur from Munich.

In the instant case, the plaintiff restaurant owner had taken out business closure insurance and was subsequently forced to close the restaurant in the spring due to an order by the Bavarian State Ministry of Health and Care from March 21 in response to COVID-19. While the insurance company sought to avoid having to pay out, the LG München ruled against it.

The clause in the terms and conditions of insurance designed to limit the scope of the insurance coverage was found to lack transparency from the perspective of the policyholder and was thus deemed to be invalid. The LG München therefore concluded that the insurer would have to pay compensation in the amount of around 427,000 euros.

The court clarified that the obligation on the part of the insurer to indemnify did not depend on the legal form or legality of the closure order. Moreover, it was not necessary for COVID-19 to be present at the insured workplace. According to the general terms and condition of insurance, the only relevant factor was whether the workplace was closed based on the German Protection against Infectious Diseases Act (Infektionsschutzgesetz, IfSG). Such were the circumstances in this case, with the plaintiff’s restaurant having been completely closed and it not being reasonable to expect the business to continue operating on a legal basis as a takeaway business.

The court noted that if a clause in the general terms and conditions of insurance is to effectively limit the scope of the insurance coverage, the extent of the remaining insurance coverage needs to be made abundantly clear to the policyholder. This was not the case here.

The LG München held that neither government liquidity support related to COVID-19 nor short-time allowance were to be taken into account in determining the amount of compensation due.

A similar case saw a large restaurant and the insurance company reach an extraordinary agreement. The prospects of enforcing claims arising from business closure insurance policies continue to improve.

For more information:

https://www.mtrlegal.com/en/legal-advice/corona.html

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CoronaPressemitteilungen
news-268 Tue, 08 Dec 2020 10:30:48 +0100 COVID-19 – Provider of business closure insurance must pay out https://www.mtrlegal.com/en/news-and-press/detail/news/covid-19-provider-of-business-closure-insurance-must-pay-out.html The Landgericht (LG) München – the Regional Court of Munich – recently delivered a judgment requiring an insurance company to pay out on a business closure insurance policy. The restaurant owner in question will now receive substantial compensation because of the closure of his premises due to COVID-19.

Many business owners and traders have had to close their businesses because of the coronavirus pandemic, with the food service industry, among others, having been hit particularly hard by the lockdown. But there is hope: the Landgericht München delivered a judgment on October 1, 2020 requiring an insurance company to pay substantial compensation to a restaurant owner from Munich who had taken out a business closure insurance policy with the company. The owner’s premises remained closed for 30 days due to COVID-19, with this giving rise to an indemnity claim against the insurer in the amount of around one million euros.

Insurers have to date consistently refused to indemnify policyholders for losses resulting from business closures due to COVID-19, arguing that the coronavirus is not mentioned in their business closure policies and not covered as an insured disease or illness. Insurers have also contended that businesses closures have generally not been based on the German Protection against Infectious Diseases Act (Infektionsschutzgesetz, IfSG) but on decisions of general application adopted by Germany’s federal states (Bundesländer), and thus they are not required to pay out. We at the commercial law firm MTR Rechtsanwälte can report, however, that these arguments have since been dealt a heavy blow by the Landgericht München.

In the case in question, the restaurateur was forced to close his premises based on a decision of general application adopted by the Bavarian state government on March 21, 2020 in response to COVID-19. The restaurant was subsequently reopened in mid-May. It was only at the beginning of March that the restaurant owner, particularly in view of the coronavirus pandemic, took out business closure insurance. The insurer did not wish to pay out on the policy, reasoning, among other things, that the owner needed to have first taken action against the state government’s ordinance.

This line of reasoning was rejected by the LG München. The court held that the matter did not turn on the legality of the order or the legal form of the decision of general application, and that it had therefore not been necessary for the restaurateur to take action against the order. The obligation on the part of the insurer to indemnify was also not conditional on COVID-19 being present in the workplace. Moreover, the court found that the business had in fact been closed based on the Infektionsschutzgesetz, noting that the Bavarian Ministry of Health made explicit reference to the enabling provisions of the IfSG in adopting its decision of general application. It went on to point out that even with the help of takeaway business, the owner would not have been able to keep the business open.

While the ruling is not yet final, it may nonetheless pave the way for many other claims against insurance companies offering business closure policies.

For more information:

https://www.mtrlegal.com/en/legal-advice/corona.html

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CoronaPressemitteilungen
news-264 Tue, 01 Dec 2020 12:40:20 +0100 BFH on taxable income from interest in connection with transfer of house along with plot of land in return for annuity payments https://www.mtrlegal.com/en/news-and-press/detail/news/bfh-on-taxable-income-from-interest-in-connection-with-transfer-of-house-along-with-plot-of-land-in.html According to the Bundesfinanzhof (BFH) – Germany’s Federal Fiscal Court – transferring a plot of land at a discount in the context of anticipated succession in return for annuity payments gives rise to taxable income from interest.

The scenario is not uncommon: the children get a plot of land along with a building within the framework of anticipated succession, whereas the parents receive monthly annuity payments. But beware: we at the commercial law firm MTR Rechtsanwälte note that the parents may accrue taxable income from interest under this arrangement.

Such were the circumstances in a case adjudicated by the Bundesfinanzhof on June 14, 2020 (Az.: VIII R 3/17). The plaintiffs – a jointly assessed married couple – had transferred a plot of land along with a house to their son and the wife in return for annuity payments in the amount 1,000 euros per month. The payments were to be made over a period of 30 years.

The tax authorities identified income from interest in connection with the annuity payments that it found was subject to income tax. The parents took legal action against this finding, arguing that the annuity payments ought not to be divided up into a repayment and an interest portion. They claimed to have deliberately transferred the property in return for low annuity payments over a long period of time, and thus ultimately below market value, in consideration of their son’s financial standing. In doing so, they were intentionally forgoing income for the financial benefit of their son and the wife. For this reason, the annuity payments did not include taxable income from interest.

Their claim was unsuccessful. The BFH found that this did not constitute a gratuitous transfer of inheritance. Notwithstanding the fact that the transfer had taken place at below market value, it still constituted a sales transaction that was subject to income tax.

The BFH went on to state that annuity payments from a sale-related annuity certain are to be divided up among the buyer and the seller into a repayment and an interest portion in accordance with section 13(1) of the German Valuation Act (Bewertungsgesetz, BewG), with the repayment portion equaling the present value of the basic pension entitlement, which is ascertained by discounting all outstanding instalments. The court held that the seller obtains taxable income from interest that amounts to the difference between the present value of the pension claim and the respective annuity payment. The BGH concluded that with the annuity payments in the relevant year amounting to 12,000 euros, the interest portion and the taxable interest income in this case was 9,420 euros.

Lawyers with experience in the field of tax law can offer advice.

For more information:

https://www.mtrlegal.com/en/legal-advice/tax-law/tax-dispute.html

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Steuerstreit
news-263 Wed, 25 Nov 2020 10:32:34 +0100 German patent law draft modernization act approved https://www.mtrlegal.com/en/news-and-press/detail/news/german-patent-law-draft-modernization-act-approved.html German patent law is set to become simpler and more modern. On October 28, 2020, Germany’s federal cabinet approved the second draft of the act designed to simplify and modernize German patent law.

The federal government wants to further strengthen intellectual property rights in connection with the protection of industrial property. To this end, the federal cabinet has now approved the second draft of the act designed to simplify and modernize German patent law (“Zweites Gesetz zur Vereinfachung und Modernisierung des Patentrechts”). We at the commercial law firm MTR Rechtsanwälte can report that the act is likely to enter into force at the beginning of 2021.

The planned law addresses two main areas: it provides for an exceptional restriction on injunctive relief under patent law on grounds of proportionality. It also seeks to expedite patent nullity proceedings by enabling greater synchronicity between infringement and nullity actions, and to improve the protection of confidential information in patent litigation.

The new rules governing injunctive relief in response to patent and utility model infringements are meant to give greater prominence to the principle of proportionality by providing for the possibility of exceptional restrictions on injunctive relief due to particular circumstances in individual cases where claiming relief would lead to disproportionate and – because of the right of exclusivity – unjustified hardship for the infringing party.

The amended legislation also envisages procedural changes with respect to nullity proceedings before Germany’s Federal Patent Court, the Bundespatentgericht. It includes provisions aimed at, among other things, expediting proceedings by empowering the Bundespatentgericht to issue its indicative ruling pursuant to section 83 of the German Patent Act (Patentgesetz, PatG) to the court hearing the infringement dispute after only six months. To this end, the proceedings before the Bundespatentgericht between service of process and qualified indicative ruling are to be streamlined. The patent holder will still be able give its account within one month of the action for annulment being served. What is new is that there will be an additional period of one month for justifying the objection. The Bundespatentgericht then has a further four months in which to deliver the qualified indicative ruling.

There are also specific provisions dedicated to improving the protection of confidential information that deal with the protection of trade secrets in patent, utility model, and semi-conductor protection litigation.

Other changes aim to simplify and clarify, including plans to align trademark law with the current legal framework under the Madrid System for the International Registration of Marks.

Lawyers with experience in the field of IP law can offer advice.

For more information:

https://www.mtrlegal.com/en/legal-advice/ip-law.html

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IP RechtPressemitteilungen
news-261 Fri, 20 Nov 2020 11:47:10 +0100 Taxable income from renting via Airbnb – Possibility of voluntary disclosure https://www.mtrlegal.com/en/news-and-press/detail/news/taxable-income-from-renting-via-airbnb-possibility-of-voluntary-disclosure.html Rental income is subject to tax. Those renting out apartments via platforms such as Airbnb need to be mindful of this if they are to avoid committing tax evasion.

Income from renting and leasing is subject to tax. This applies to both real estate companies and private landlords, even if they only occasionally rent out a room or an apartment through Airbnb. The rental income needs to be included in the relevant income tax declaration. Concealing these earnings risks trouble with the tax authorities and allegations of tax evasion. Under these circumstances, those renting out real estate ought to review their legal options, including voluntary disclosure.

Sharing is the order of the day, and this is particularly noticeable in the case of apartments. People who are not using their apartment for a time or who have an empty room are subletting them for a limited period using portals such as Airbnb. While the parties renting out the properties are pleased about the extra income, many of them are not aware that this income is subject to tax if it exceeds the nugatory threshold of 520 euros per annum.

These rental arrangements have not escaped the attention of the German tax authorities, which now require Airbnb to hand over the data. The Hamburg Tax Investigation Office announced at the beginning of September that it has now received the data and will make it available to the relevant state tax authorities.

Lessors who have concealed this rental income are thus potentially facing not only the inconvenience of having to pay tax arrears but also the prospect of tax evasion proceedings. That is why it is vital to take swift action now and assess whether it is still possible to submit a voluntary declaration for tax evasion.

Such a voluntary declaration can only lead to exemption from punishment if the tax evasion has yet to be discovered. If the data from Airbnb has already been received and evaluated by the relevant tax office, this precludes voluntary disclosure from being fully effective. A voluntary declaration can nevertheless still have a mitigating effect on punishment. In addition, it is important for the voluntary declaration to be complete and include all the relevant tax-related information pertaining to the past ten years.

However, it is almost impossible for someone who is not an expert to satisfy these requirements. Lawyers with experience in the field of tax law would be more than happy to assist you in preparing an effective volunta declaration.

For more information:

https://www.mtrlegal.com/en/legal-advice/tax-law/voluntary-disclosure.html

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SelbstanzeigePressemitteilungen
news-258 Tue, 10 Nov 2020 10:01:44 +0100 Wirecard AG – Shareholders can register claims in insolvency proceedings https://www.mtrlegal.com/en/news-and-press/detail/news/wirecard-ag-shareholders-can-register-claims-in-insolvency-proceedings.html Insolvency proceedings concerning Wirecard AG were opened on August 25, 2020 (Az.: 1542 IN 1308/20). Creditors had until October 26, 2020 to register their claims with the insolvency administrator.

Wirecard AG filed for insolvency at the end of June. Two months later, insolvency proceedings were opened at the Amtsgericht München – the District Court of Munich – concerning the company and six subsidiaries. For Wirecard AG’s shareholders and investors, the bankruptcy of the former DAX-listed company brings with it the prospect of significant financial losses. Following the opening of insolvency proceedings, they were then able to register their claims in the insolvency schedule as a means of at least partially offsetting their losses.

Claims brought by shareholders in insolvency proceedings are normally treated as low priority, i.e. they are right at the bottom of the list of creditors. However, since the situation with Wirecard is shaping up to be a real accounting scandal and economic crime thriller, with the public prosecutor’s office investigating, among other things, possible fraud and market manipulation, low priority status may well be inapplicable in this instance. For this reason, it is as important for shareholders to register their claims in writing with the insolvency administrator by October 26, 2020 lest they come away empty-handed. We at the commercial law firm MTR Rechtsanwälte note, however, that the claims need to be properly justified rather than simply taking a blanket approach.

Even if the insolvency administrator endeavours to arrange Wirecard AG or parts of the business in a manner that is attractive to buyers and investors and to increase the size of the insolvency estate, the creditors should not hold out too much hope of receiving a large insolvency dividend given that the company is substantially overindebted.

This means that the insolvency dividend can only be expected to partially compensate for the financial losses incurred. To further reduce these losses, claims for damages can also be asserted independently of the insolvency proceedings.

Apart from the alleged offenders, the former members of Wirecard AG’s executive and supervisory boards are also potential candidates against whom claims for damages may be asserted. Given that fraudulent accounting appears to have been practiced since as early as 2015, it ought to be assessed whether they failed to live up to their supervisory responsibilities. It may also be possible to bring claims for damages against the auditors who regularly issued audit certificates over the years despite the balance sheet irregularities.

Lawyers with experience in the field of capital markets law can review Wirecard investors?’ claims for damages.

For more information:

https://www.mtrlegal.com/en/legal-advice/capital-markets-law/wirecard-ag.html

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Wirecard AGPressemitteilungen
news-256 Thu, 29 Oct 2020 13:29:02 +0100 OLG Köln on standards for advertisements featuring “Testsieger” https://www.mtrlegal.com/en/news-and-press/detail/news/olg-koeln-on-standards-for-advertisements-featuring-testsieger.html Anyone promoting products or services using the accolade “Testsieger” (test winner) must also provide a source reference for the test. Important information is otherwise being withheld from consumers according to the Oberlandesgericht (OLG) Köln – the Higher Regional Court of Cologne.

The use of test results in product advertising is popular due to the considerable influence test certifications can have on consumers’ purchasing decisions. This is particularly true of tests conducted by prestigious bodies or organizations. That is why the legislature has established strict requirements for advertisements that make reference to test winners. We at the commercial law firm MTR Rechtsanwälte note that failure to comply with these requirements means the advertising is in breach of competition law.

Advertisements featuring test results must be transparent to consumers, who need to be able to make sense of the test and its criteria. According to a ruling of the OLG Köln from July 10, 2020, such adverts must therefore include a source reference for the test (Az.: 6 U 284/19).

In the instant case, a DIY store had been promoting a wall paint in a prospectus using the accolade “Testsieger”. While the seal for the relevant test certification from the German consumer organization Stiftung Warentest appeared on the bucket of paint, the same could not be said of a source reference for the test. The OLG Köln deemed this a breach of competition law, reasoning that the absence of a source reference meant that important information was being withheld from consumers and that the advertising was thus in breach of the German Unfair Competition Act (Gesetz gegen den unlauteren Wettbewerb, UWG).

The court noted that the Bundesgerichtshof (BGH) – Germany’s Federal Supreme Court – has already clarified in a number of rulings that test ratings featured in advertisements must be clearly and easily verifiable. This includes citing a source reference that is easy for consumers to find so that they can scrutinize and make sense of any advertisements informed by the test in question. The OLG went on to explain that certain criteria can play a crucial role in informing consumers’ purchasing decisions – in the case of paints, for example, the coverage – whereas other factors only play a minor role.

In the case at issue, the Testsieger seal was only visible as part of the product illustration and thus not emphasized separately. The court noted that it remains an open question whether this constitutes Testsieger advertising, and therefore granted leave to appeal to the BGH.

Violations of competition law can give rise to injunction suits and claims for damages. Lawyers with experience in the field of competition law can offer advice.

For more information:

https://www.mtrlegal.com/en/legal-advice/competition-law.html

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WettbewerbsrechtPressemitteilungen