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ARTICLE · 03 NOVEMBER 2026

The Insolvency Administrator's Long Memory – When Gratuitous Benefits Are Reclaimed

Mayer Brown
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Under German insolvency law, gratuitous transfers made within four years of insolvency filing can be clawed back by administrators without proving bad faith. This creates substantial exposure for shareholders, directors, and their relatives who received company assets, distributions, or benefits during this period. Understanding the prerequisites for avoidance under section 134 InsO and implementing protective measures is essential for corporate stakeholders.

GermanyInsolvency/Bankruptcy/Re-Structuring
Marco Wilhelm
Marco Wilhelm
Tina Hoffmann
Tina Hoffmann
Malte Richter
Malte Richter
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I. WHY THIS TOPIC IS IMPORTANT

When someone receives a gift, the recipient rarely considers the possibility of the donor’s insolvency. Yet, this is precisely where a significant claw-back risk arises: Under section 134 of the German Insolvency Code (Insolvenzordnung, InsO), the insolvency administrator may challenge gratuitous transfers made by the debtor within the four years preceding the filing of the insolvency petition—without having to prove that the recipient acted in bad faith or was aware of the debtor’s financial distress.

In practice, this primarily affects shareholders, managing directors, and their relatives who have received assets from a company that later became insolvent. Because the four-year challenge period also covers transactions carried out long before the onset of financial difficulty, the risk exposure for recipients is substantial.

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This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

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