Insolvency law: indebtedness pursuant to section 19 (2) sentence 1 InsO
(1) Over-indebtedness under insolvency law is an independent evidentiary sign of the debtor's intention to prejudice creditors and full proof of the avoidance defendant's knowledge of this intention.
(2) The strength of the evidence depends on the likelihood of the debtor's insolvency and the imminence of its occurrence.
(3) The burden of presentation and proof of the factual circumstances from which the debtor's over-indebtedness under insolvency law follows shall in principle be borne by the insolvency administrator in the insolvency avoidance proceedings.
(4) The submission of annual financial statements within the framework of the taxation proceedings, which show a deficit not covered by equity capital, does not trigger an obligation on the part of the tax authorities to observe and inquire with regard to possible over-indebtedness under insolvency law.
The insolvency of a GmbH regularly triggers civil court disputes which the insolvency administrator conducts, for example, against the managing directors or against various opponents of avoidance. Such court proceedings are often only successful if the plaintiff insolvency administrator succeeds in meeting the burden of presentation and proof incumbent upon him. In practice, both the indications of proof developed in case law and the question of how the burden of presentation and proof is distributed in the first place play a role.
The Federal Supreme Court (BGH) dealt with both issues in the judgment of 03.03.2022 discussed here, which was issued in the area of avoidance with intent pursuant to Sections 133 (1), 143 (1) InsO. Specifically, the court ruled on the question of the distribution of the burden of proof in active proceedings of the contesting insolvency administrator in which the question of over-indebtedness under insolvency law is disputed between the parties. It also dealt with the question of whether over-indebtedness under insolvency law pursuant to section 19 (2) sentence 1 InsO can be an evidentiary sign for the subjective prerequisites of a challenge with intent.
Matter of the BGH-Decision
In its decision to be discussed here, the Federal Supreme Court clarified that over-indebtedness under insolvency law within the meaning of section 19 (2) sentence 1 InsO is also an independent evidentiary sign for the existence of the subjective prerequisites of the facts in the context of the avoidance with intent under the rules of sections 133 (1), 143 (1) InsO.
The BGH dismissed the appeal of the plaintiff insolvency administrator against a judgment of the OLG Hamburg of 21 June 2018 (1 U 29/18). Previously, the insolvency administrator had already failed in the first instance with his action for avoidance against the tax authorities he had claimed against at the Hamburg Regional Court (judgment of 19 January 2018 - 322 O 322/17).
Specifically, the insolvency administrator asserted claims for restitution against the defendant tax authority in an active lawsuit following avoidance in insolvency under the aspect of avoidance with intent. He demanded the restitution of 20,792.43 euros that had previously been collected from the insolvency debtor's account by the tax authorities by direct debit. The plaintiff insolvency administrator derived the subjective prerequisites of the avoidance with intent, namely the intention of the debtor to disadvantage the creditors and the corresponding knowledge of the opponent of the avoidance, from the fact that the tax authorities were aware of two annual financial statements of the debtor at the time of the direct debit, each of which showed a deficit not covered by equity.
The BGH dismissed the appeal and ruled that a challenge under section 133 (1) InsO fails in any case because the defendant tax authority was not aware of a possible intention of the debtor to disadvantage creditors.
The court states that there are various indications of evidence that speak in favour of the subjective prerequisites for contesting intent under section 133 (1) InsO. These included not only the recognised threat of insolvency or the fact that insolvency had already occurred. The granting of an incongruent cover in financially tight circumstances could also speak for the debtor's intention to disadvantage creditors and for the contesting party's knowledge of this intention. Further evidence would be a direct disadvantage to the creditors caused by the challenged legal act or the transfer of the last valuable object to a - possibly close - third party. Finally, the granting of a special advantage in the event of insolvency also speaks in favour of an intention to disadvantage creditors and knowledge of this.
The court went on to say that the catalogue of evidential signs mentioned by the court was not exhaustive and that further circumstances speaking in favour of the subjective prerequisites of a challenge with intent were conceivable and had to be included by the judge of the facts in the overall assessment to be made in each individual case. In this context, a schematic approach was not permissible. First of all, the circumstances under which the challenged legal act was carried out could justify the assumption of the subjective prerequisites of the challenge of intent in itself. The same applied to the debtor's economic situation. According to the Federal Supreme Court, the crisis may be known to have progressed to such an extent that a sufficient conviction of the debtor's intention to disadvantage creditors and of the opponent's knowledge of this intention can be based on this alone within the meaning of section 286 of the Code of Civil Procedure. However, the necessary conviction could also only result from a synopsis of the economic situation and the circumstances under which the challenged legal act was undertaken.
Next, the BGH points out that legal over-indebtedness pursuant to section 19 (2) sentence 1 InsO is also one of the circumstances that must be included in the overall assessment of all circumstances speaking for and against the debtor's intent to prejudice creditors and knowledge thereof. The BGH cites the negative prognosis for the continuation of the business, which makes the occurrence of insolvency probable, as the decisive reason for this.
In this context, the BGH explicitly recognises over-indebtedness under insolvency law as a sign of proof for the subjective prerequisites for the challenge of intent under section 133 (1) InsO. It emphasises that over-indebtedness is not to be taken into account only because the debtor who is over-indebted under insolvency law is in many cases at the same time threateningly insolvent within the meaning of section 18 (2) InsO. Rather, over-indebtedness is an independent sign of proof. However, the BGH emphasises that the strength of this evidentiary sign of over-indebtedness under insolvency law largely corresponds to the evidentiary sign of imminent insolvency.
According to the BGH, the decisive factor for the strength of the evidentiary sign is the probability of the occurrence of insolvency and the proximity in time of its occurrence, both in the case of imminent insolvency and in the case of over-indebtedness. If the occurrence of insolvency is not certain or not imminent, other additional circumstances are required to establish the intent to prejudice the creditor. The situation was similar in the case of over-indebtedness under section 19 (2) sentence 1 InsO. This is because a legal entity that is over-indebted under insolvency law does not have sufficient assets to cover its existing liabilities. Moreover, the continuation of its business until the end of the forecast period is not predominantly probable. The negative going concern forecast makes the later occurrence of insolvency likely.
According to the BGH, the fact that over-indebtedness under insolvency law within the meaning of section 19 (2) InsO triggers an obligation to file for insolvency, unlike imminent insolvency under section 15a InsO, does not justify a stronger assessment of the evidentiary sign of over-indebtedness under insolvency law.
As a result, the BGH states that the defendant tax authority was not aware of a possible intention on the part of the debtor to disadvantage creditors. In doing so, the court also deals with the two annual financial statements of the insolvency debtor known to the tax authorities, both of which show a deficit not covered by equity. In this regard, the BGH states that an increasing commercial balance sheet over-indebtedness alone cannot lead to the conclusion that the tax authorities were aware of an intention to disadvantage creditors. The BGH justifies this by stating that there is no statutory presumption for the assumption of over-indebtedness within the meaning of section 19 InsO, as regulated, for example, in section 17 (2) sentence 2 InsO in the context of cessation of payments. Therefore, the insolvency administrator contesting under section 133 (1) InsO who wishes to base the intent to prejudice creditors or knowledge thereof on over-indebtedness under insolvency law must, in principle, fully prove its occurrence. The BGH expressly emphasises that this also applies to the negative going concern prognosis. This is remarkable, because it is known from legal disputes that an insolvency administrator conducts against a GmbH managing director that the managing director is burdened with presenting and proving the existence of a positive going concern prognosis and not the plaintiff insolvency administrator for its non-existence. The BGH explains that the case law of the Second Civil Senate, according to which a commercial balance sheet with a deficit not covered by equity capital is indicative of the question of whether a company is over-indebted under insolvency law, cannot regularly be used in favour of the contesting insolvency administrator in the context of an appeal against insolvency. The court justifies this by pointing out that, unlike liable corporate bodies, opponents of avoidance are regularly external persons.
In summary, the BGH states that the insolvency administrator challenging the insolvency proceedings pursuant to section 133 (1) of the German Insolvency Code (Insolvenzordnung - InsO) must, as a starting point, demonstrate and prove both the mathematical over-indebtedness within the meaning of section 19 (2) sentence 1 of the German Insolvency Code (InsO) and the existence of a negative going concern prognosis. Furthermore, it is necessary that the insolvency-related overindebtedness has come to the knowledge of the debtor and has become known to the opponent of the avoidance.
Even if the plaintiff insolvency administrator succeeds in demonstrating and proving all of this, the strength of the evidence of the over-indebtedness under insolvency law thus established, as described above, must also be taken into account: It alone is not even sufficient as evidence to prove the subjective requirements for avoidance with intent. As stated above, this requires additional circumstances inherent in the manner of the legal act, which must also be presented and proven by the plaintiff insolvency administrator.
BGH 9. Zivilsenat, Urteil vom 03.03.2022 - IX ZR 53/19 www.http://juris.bundesgerichtshof.de/
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