BGH revision of precedents

On May 6, 2021, the IXth Senate of the Federal Court of Justice issued in a decision (IX ZR 72/20) a detailed opinion on the subjective prerequisites for contestation of willfully disadvantageous transactions (Section 133 Insolvency Act [Insolvenzordnung; InsO]) and in part departed from the Senate’s previous decisions (“revision”).

Attorney and insolvency administrator Joachim Büttner considers this decision to be particularly relevant in practice, as “the contestation of willfully disadvantageous transactions has been extended to include a future dimension in the subjective elements of the act. The moment of the insolvency is not the sole determining factor. The decisive factor now is whether the insolvency debtor also knew, or accepted in full awareness, that it would still be insolvent in the future. The party opposing the contestation was consequently aware of the willful disadvantageousness of the transaction if it knew of this situation.

“In addition, the insolvency administrator now also has the burden of presenting and proving the actual circumstances that must be realized in addition to a recognized insolvency and that there was no reasonable prospect of remedying the illiquidity. However, a lack of prospects of closing the coverage gap must be assumed if the cause of the insolvency has not been eliminated and the debtor has simply continued to ‘muddle through’.”

Consequently, it will become more difficult for insolvency administrators to prove the debtor’s intent to disadvantage creditors and the knowledge of the party opposing the contestation.

The decision of the lower court was annulled. The matter was referred back to the previous court.

Link to the BGH decision of May 6, 2021, IX ZR 72/20: