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Grounds for opening, the application and the course of German insolvency proceedings
The module’s worked examples, then cases to attempt before revealing their solution · 1 section · 226 words · 2 min
Practical case
Three questions before filing
The upholsterer from the introduction has due liabilities of €41,000 and €6,500 in her account; she has not paid October's wages or rent. Her supplier wants to apply and base the application on over-indebtedness. She lives in one town and runs her workshop in a neighbouring town that belongs to a different court district. On which ground can the supplier rely, which grounds would be open to her for her own application, and at which court would the application be filed?
Hint: First ask whether the debtor is a natural person, then who may rely on which ground, and finally where the centre of her activity lies.
Show the solution
The debtor is a natural person. Over-indebtedness is not a ground against her under s. 19(1), so the supplier must base the application on illiquidity. Making it credible is easy: anyone who no longer pays wages and rent has stopped making payments within the meaning of s. 17(2) sentence 2. For her own application, illiquidity is available and, had she acted earlier, impending illiquidity as well, which s. 18(1) reserves to the debtor's application. Under s. 3(1) sentence 2 the insolvency court in whose district the workshop lies, as the centre of her self-employed activity, has exclusive jurisdiction, not the court of her residence.
Answer: Supplier: illiquidity; she: impending illiquidity too; the court where the workshop is
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