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BvCM Federal Congress 2017: reform of the law on avoidance of transactions in insolvency proceedings remains an issue

Since the petition at the previous Federal Congress of the Bundesverband Credit Management (BvCM) in 2016, many things have changed regarding the reform of the law on avoidance in insolvency proceedings. The amendment, for which PASCHEN Rechtsanwälte made remarkable efforts in their role as one of BvCM’s stakeholders since 2013, came into force on 5 April 2017. But can creditors now hope for a fairer handling of § 133 of the German Insolvency Code by the legislature? The recent Federal Congress on the  25 and 26 October 2017 in Kassel an opportunity was taken to find an answer to this question.

One of the highlights of the two-day event, where members of the association informed themselves on the latest developments and offers in their field, was a panel discussion moderated by BvCM’s capital representative attorney at law Lutz Paschen on the new right of avoidance from the perspective of concerned parties. Invited to the round table were the insolvency administrator and attorney at law Eric Coordes, the journalist and producer Fabian Sabo, who interviewed and accompanied concerned creditors for a television programme, the concerned creditor Hannelore Stahl, whose inland navigation company who is currently facing a claim in court against in the amount of a quarter of a million Euro, as well as the creditors representative and attorney at law Jürgen Baumeister.

All panel participants in principle welcome the reform whereby attorney at law Coordes, who generally approves of the added legal certainty for administrators, also criticised it. Thus, it is still unclear how additional evidence indicating financial difficulties of the debtor when concluding a payment agreement shall be evaluated. As an administrator, he often is just obligated to contest; otherwise creditors can pursue remedies against him. However, for Hannelore Stahl who is concerned herself, the regulations should have gone even further. The fact that she speaks in public about her company’s situation, is not a matter of course, as Fabian Sabo said. During his research for his TV programme “Unverschuldet pleite?” (“Broken without fault?”) he has met many entrepreneurs concerned, who were downright ashamed, but also felt were completely unfairly treated. He suspects a “considerably higher number” of companies who are no longer capable of action due to avoidance of transactions in insolvency proceedings.

The legal experts in the round agreed with  Jürgen Baumeister’s statement that the Federal Supreme Court shows significantly more creditor friendly tendencies in its first decisions after the reform entered into force. Attorney at law Baumeister expects the first court decisions under the new rules by the middle of next year.

In his lecture, attorney at law Michael Schmidt also dealt with the reform of avoidance of transactions in insolvency proceedings and explained what to consider when doing business with companies in crisis against the background of the new regulations.

As the BvCM celebrates its 15-year anniversary this year, the congress was marked by this anniversary. “Excellence in Credit Management” was the event’s motto, and, according to this, was demonstrated with Best Practices and forward-looking approaches to the digital.

The date for the next Federal Congress is already determined. It will take place on the 17 and 18 October 2018 in Munich.