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Determination of claims in the insolvency table

Informative BGH (German Federal Court of Justice) decision on responsibilities and cooperation obligations of insolvency administrators

Insolvency administrator must examine claims filed in insolvency proceedings in order to come to a decision on whether these are to be determined in the (insolvency) table. If documents allowing the claim to be determined with certainty are still missing at the time of the creditors’ meeting, it is typically “provisionally disputed”.

This term, which is often used in insolvency proceedings, was subject to criticism in high court case law when the BGH (German Federal Court of Justice) ruled that there had been no such thing as a “provisional dispute” in a legal sense even long before the current decision. There is only a distinction between established and disputed claims (cf. BGH decision from 9 February 2006 – IX ZB 160/04, NJW-RR 2006, 773 (8)). In connection with the decision presented here (BGH, decision from 27 April 2023, reference no IX ZR 99/22), the importance of this is now significant.

The decision relates to claims for damages against an insolvency administrator in accordance with Section 60 InsO (Insolvency Code). The insolvency administrator had initially “provisionally” disputed a claim. After dropping the dispute, however, he failed to take steps to determine whether the claim was eligible for inclusion in the insolvency table. The disputing tax office noticed the missing determination in the insolvency table at such a late stage that this was no longer possible, resulting in the state being left empty-handed in the final distribution.

Against this backdrop, the BGH concluded that the insolvency administrator had rendered themselves liable for damages. Whenever a provisional dispute is withdrawn, the administrator is obliged to (actively) work towards correcting the insolvency table (BGH, loc. cit., (13)).

In this context, the decision relates to the question of to whom the insolvency administrator must declare the withdrawal of their objection and, in doing so, comprehensively present the state of discussion at the time the decision is made. This results in the determination that, in the opinion of the BGH, the question must be decided such that the insolvency administrator is able to declare that they have withdrawn their objection vis-à-vis either the reporting creditor or the insolvency court (BGH, loc. cit., (23)). As justification, it states here in particular that the burden of recovery in accordance with Section 179 (1) InsO (Insolvency Code) lies with the creditor, meaning that, in principle, they must ensure a claim is determined in the table if the dispute is dropped, including, if necessary, using judicial assistance by means of a declaratory judgement (BGH, loc. cit., (27)).

In the event of a “provisional dispute”, however, the administrator allegedly “suggested” reporting once again, despite there being no legal obligation to do so, which means that, unless they ensure the claim is retrospectively determined in the table themselves based on an order, they must support the creditor in their efforts to determine a claim in the table by informing them accordingly (BGH, loc. cit., (30)).

Note, however: the decision, as is often the case with the 9th court of appeal responsible for insolvency law, must simultaneously be provided with reservations on this (supposedly) clear statement, as the court itself has not conclusively decided on the case, but rather referred it back to the lower court with a note to clarify in particular whether contributory fault attributable to the plaintiff would preclude the claim for damages (BGH, loc. cit. (32)).

Overall, the decision is certainly worth reading as it comprehensively covers the processes and responsibilities associated with attempting to determine claims in the table. In particular, creditors should deduce from this the importance of staying on the ball in insolvency proceedings until the claim has at least been determined in the table in a binding manner.

At the same time, it opens up unanticipated possibilities for recourse for parties whose claims have been provisionally disputed and not determined in the table despite the dispute later being abandoned.

We at PASCHEN will be happy to help you with this. You can find more information on SanInsKG: new special rules for crisis-related insolvency law remain under the radar