German law · English information
A business crisis can give rise to personal claims against directors. Filing duties, payments after insolvency and other breaches must be assessed separately.
Filing duties
For entities within section 15a InsO, filing is required without culpable delay, with maximum periods of three weeks after illiquidity and six weeks after over-indebtedness. Imminent illiquidity alone does not trigger this particular mandatory filing duty.
Payments after insolvency
Section 15b InsO addresses payments after illiquidity or over-indebtedness. Exceptions depend on proper management diligence and the actual restructuring or filing steps. A blanket instruction either to stop all payments or to continue unchanged is inappropriate.
Defending claims and coordinating insurance
We examine the alleged insolvency date, individual payments, consideration received, a potentially lower creditor loss and limitation. Contemporaneous financial records are crucial. D&O cover, exclusions, notification deadlines and any criminal proceedings need separate assessment. Company, director and shareholder interests may conflict.
Related information
Procedures overview · Creditor rights · Corporate insolvency
Official German Insolvency Code · Official StaRUG
Practical implementation
Examining payments individually and in context
Claims under section 15b InsO require assessment of insolvency grounds, timing, the nature of a payment and possible justification. Saying that a payment supported the business is insufficient without applying the statutory requirements. Conversely, not every account movement necessarily constitutes a compensable depletion. Bank statements, approvals, consideration received and the contemporaneous liquidity position are important. The assessment may also concern a lower loss suffered by creditors collectively. Responsibilities and knowledge of individual directors need separate consideration.
Insurance, settlement and conflicts
D&O cover depends on the actual policy. Notification duties, temporal scope, exclusions and consent requirements may be decisive. An uncoordinated admission or settlement can cause additional difficulties. The company, insured director and insurer do not necessarily share identical interests. Joint representation of several directors requires a conflict assessment. Defence deadlines and preservation of evidence should not wait until coverage has been resolved. The insurance inquiry and the response to the claimant need coordinated timetables.
Four practical examples
The following scenarios are illustrative examples, not reports of client matters. The outcome depends on the facts and applicable rules.
Example 1: Paying for continued production
Management paid for materials after the alleged onset of insolvency. The review concerns the onset date, statutory conditions and actual use of the payment. A general intention to rescue the business does not replace an assessment of the particular transaction.
Example 2: Direct debits continue
Lease instalments and subscriptions continue automatically during the crisis. Payment systems and controls need attention. Any subsequent claim should be assessed against the individual debits, consideration and available means of preventing payment.
Example 3: The D&O insurer requests evidence
A claim letter triggers an information request from the insurer. Notification should be timely and coordinated. The administrator's deadline still needs attention; a coverage review does not automatically suspend it.
Example 4: Two directors face claims
Directors rely on different allocated responsibilities. The actual division of work and monitoring arrangements must be examined. A coordinated defence may help, but joint legal representation depends on the absence of conflicting interests.
Discuss your situation
Tell us your role, the parties involved and any deadlines. We will check conflicts, agree the scope of the work and explain the fees before accepting instructions.