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The validity of contract clauses allowing a party to exit the contract solely for the reason that the other party becomes illiquid and/or a petition for insolvency is filed or insolvency proceedings are instituted is a matter of intense debate.

With a spectacular ruling, the Federal Court of Justice has clarified the position on contractual clauses (Kautelarpraxis): As a matter of principle, remedial clauses for the written form are ineffective! If a long-term lease agreement violates the written form obligation of Section 550 German Civil Code, with immediate effect, such lease…

The Regulation of the European Parliament and of the Council on Insolvency Proceedings (EU Insolvency Regulation) regulates the application of national insolvency codes in cross-border insolvency proceedings. This also applies to the issue according to which legal order the setting aside of acts is determined.

The government coalition made it after all. On 16 February 2017, the German Bundestag (Parliament) adopted the government’s draft bill on the reform of the Insolvenzanfechtung (challenging debtor’s transactions in insolvency proceedings),. Some changes were made “at the last minute”. The reform will not take effect until it is…

Fellow shareholders are personally liable in the case of a (forced) redemption of GmbH shares when they have triggered the prerequisites under §§ 34 para. 3, 30 para. 1 German Act on Companies with Limited Liability [Gesetz betreffend die Gesellschaften mit beschränkter Haftung, "GmbHG"] or an insolvency situation or have otherwise…

After the EU Member States have largely ignored the 2014 recommendations on the introduction of pre-trial insolvency proceeding, the Directorate-General for Justice and Consumers has taken action. The Directorate-General published a so-called roadmap on 3 March 2016.pursuant to the Action Plan of 30 September 2015 which is directed…

Agreements on instalments are common practice in the day-to-day business transactions in Germany if the business partner informs that he cannot pay an invoice by the agreed maturity date.