Germany has notoriously broad voidability laws. As a rule of
thumb, any payment by a third party has high voidability risks if
the third party has no obligation to make the payment under the
contract. Such payments qualify as incongruent (3 months hardening
period, very few further requirements) and often qualify as
gratuitous (4 years hardening period, without any further
requirements). A recent decision of the German High Court has
stirred hope that the Court may give some leeway to cash pool
payments by group companies. However, on a closer look at the
decision, it becomes clear that the boundaries for an exemption
from voidability were set very narrowly.
Comment on the German High Court decision dated 12. September
2019 (file no.: IX ZR 16/18) by Christine Borries, LL.M. (Sydney)
and Dr. Markus Huber, lawyers of the German Hogan Lovells
insolvency and restructuring practice.
