Germany: Insolvency/Bankruptcy/Re-Structuring

Bridge loans provide critical short-term liquidity during corporate restructuring, but they carry significant legal risks for both lenders and borrowers in crisis situations. This analysis examines the legal framework governing bridge financing in restructuring contexts, including insolvency avoidance rules, unconscionable lending liability, and the ongoing obligation to file for insolvency.

Filing for insolvency carries significant legal and reputational consequences, but what happens when a company's financial situation improves after filing? This article examines the legal framework...

German insolvency law's principle of equal creditor treatment faces a critical challenge through Section 131 of the Insolvency Code, which addresses "incongruent coverage" - situations where creditors receive security or satisfaction they weren't entitled to receive, or not in that form or timing. The practical stakes are substantial: within the last month before insolvency filing, objective incongruence alone suffices for avoidance actions, with no requirement to prove the creditor's knowledge of the debto

When a licensor becomes insolvent, licensees face the risk of losing business-critical IP rights as insolvency administrators can elect to terminate ongoing license agreements. This article examines practical protective measures including sublicenses, escrow arrangements, and security interests that can help safeguard licensee interests, while acknowledging their limitations and the strategic considerations necessary when structuring IP license agreements.

A high-value vehicle lease can look straightforward until the leasing company fails. Then the business using the vehicle may find itself caught between an insolvent supplier and the bank that funded the deal. A recent dispute involving a Mercedes-Benz G 63 AMG shows why the fine print matters.

The Court of Justice of the European Union has ruled that shareholder creditors cannot use foreign choice-of-law clauses to avoid claw-back actions under insolvency proceedings.