GERMANY Law and Practice Contributed by: Konrad Schott, Jan Brinkmann and Johannes Vogel, Freshfields
2.9 Insolvency Proceedings 2.9.1 Overview of Relevant Laws and
2.9.3 Co-Ordination, Recognition or Relief in Connection With Overseas Proceedings Within the EU (excluding Denmark), the recognition of foreign insolvency proceedings is governed by Regulation (EU) 2015/848 (the Recast Insolvency Regulation), which provides for broad recognition of insolvency proceedings (as listed in Annex A of the Recast Insolvency Regulation) opened by the courts of another EU member state. The Recast Insolvency Regulation is generally based on the principle of uni - versality, which means that (in the absence of any domestic secondary proceeding) the insolvency law of the country where a proceeding first commences shall (subject to certain exemptions) apply to all mat - ters and assets of the debtor (whether located in its home jurisdiction or abroad). The Recast Insolvency Regulation does also not apply to certain enterprises from the financial and insurance industries. German conflict of law rules apply to these and to cross-border cases beyond the EU (excluding Denmark). These rules are similar to the correspond - ing provisions of the Recast Insolvency Regulation; they do not strictly follow or enact the UNCITRAL Irrespective of the operator′s insolvency, the LBA would not honour an IDERA in favour of the owner or financier of an aircraft as Germany has not ratified the Cape Town Convention. As the German aircraft register is an owner register and the operator’s consent is legally not necessary for aircraft deregistration, no deregistration power of attorney by the operator is necessary for the owner to deregister the aircraft from the aircraft register upon the operator’s insolvency. Model Law on Cross-Border Insolvency. 2.9.4 Effect of Lessee’s Insolvency on a Deregistration Power of Attorney A valid deregistration power of attorney from the owner to the operator or a financier would generally be honoured by the aircraft registry provided that it is submitted as an original or as a notarially certified copy ( notariell beglaubigte Abschrift ); it does not sur - vive the insolvency of the German owner though.
Statutory Regimes Governing Restructurings, Reorganisations, Insolvencies and Liquidations If a lease agreement is restructured consensually, the amendment is usually agreed upon under the law gov - erning the relevant lease. Restructurings under court supervision and insolven - cies are governed by the German Insolvency Code ( Insolvenzordnung ), encompassing the insolvency plan and other rescue proceedings as well as outright bankruptcy, or by the Stabilisation and Restructuring Act ( Gesetz über den Stabilisierungs- und Restruktu- rierungsrahmen für Unternehmen ), which came into force on 1 January 2021. 2.9.2 Overview of Relevant Types of Voluntary and Involuntary Restructurings, Reorganisations, Insolvencies and Receivership If the lessor′s centre of main interest is in Germany, the lessor can be subject to the proceedings set out in the German Insolvency Code ( Insolvenzordnung) . This can either be a restructuring plan aimed at rehabilita - tion of the debtor or an outright bankruptcy proceed - ing with or without the rescue of the business. In case of the lessor′s imminent inability to pay its debts ( drohende Zahlungsunfähigkeit ), the lessor′s management is at liberty to commence insolvency proceedings. The management is obliged to initiate insolvency proceedings in case of actual inability to pay the debts ( Zahlungsunfähigkeit ) or over-indebt - edness ( Überschuldung ), each as defined in the Ger - many Insolvency Code ( Insolvenzordnung ). In these cases, the proceedings can also be commenced by any creditor, whereas the restructuring plan proceed - ing is only available in a voluntary insolvency com - menced by the lessor’s management. The Stabilisation and Restructuring Act ( Gesetz über den Stabilisierungs- und Restrukturierungsrahmen für Unternehmen ) provides a specific voluntary pre- insolvency restructuring procedure which is available to debtors who do not belong to the financial sector.
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