DENMARK Law and Practice Contributed by: Henrik Sjørslev, Peter H. Knudsen, Henrik Lund-Koefoed and Levent Kitir, DLA Piper Denmark
8.2 Claims to Set Aside or Annul a Transaction or a Transfer
that constitute a breach of the basic principle of credi - tor equality. Such actions may relate to: • gifts; • renunciation of inheritance; • certain types of payment made by a debtor; • provision of security for pre-existing debt; and • general creditor-hostile actions. The ordinary claw-back period is usually three to six months. If the creditor in question is closely related to a debtor, the claw-back period is extended to two years, and the burden of proof generally shifts from the estate to the creditor.
Claw-back (and any other types of) claims are most often brought by a trustee directly on behalf of the estate. If a trustee decides not to pursue a potential claim of any kind, any creditor may – within a timeframe laid down by the insolvency court – continue to pursue the claim at their own expense. If the creditor is suc - cessful, the proceeds will be paid to the estate, but the creditor’s reasonable expenses will be covered by the estate through the proceeds of the case. A trustee will often ask one or more creditors to fund further pursuit of a claim (often court cases) if the estate itself is unable to bear the associated costs. Furthermore, the use of third-party litigation funding has increased during recent years, particularly in mat - ters where no creditors were interested in funding the litigation process in question. Such claims can be brought in restructuring and insol - vency proceedings. In restructuring proceedings, the creditors must also vote on whether identified poten - tial claims are to be pursued or not.
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