Abstract:
Dealing with suspicious transactions after the opening of insolvency proceedings has never proven to be an easy task for insolvency administrators. Furthermore, the worldwide economic and financial crisis has forced many international companies into insolvency, resulting in a need to reconcile different legal systems. This is the context in which this thesis aims to compare avoidable transactions in English and German law. This paper contains three main parts: legal terms and collective requirements, avoidance policy, and legal framework. As is necessary in a comparative work, the specific background on each of these three parts is described in relation to English and German law. Research and analysis based on journal articles, leading texts and case law was carried out. In order to analyse the reasons for different legislation in English and German insolvency law, it was also necessary to canvass the historical development of each. The research shows that apart from one provision in the English Insolvency Act 1986, both insolvency regimes require current formal insolvency proceedings for an avoidance of transactions. The permitted grounds for opening such proceedings in German law are split up into the two categories of illiquidity and indebtedness, whereas English law incorporates several different examples of illiquidity. From a German perspective, German insolvency law seems easier to handle than its English counterpart. The latter appears to maintain greater consistency with the case law for historical reasons. In terms of policy, there is an ongoing discussion in both countries regarding the fact that German insolvency law incorporates insolvency policy at the very beginning of the Insolvenzordnung. This research presents an astonishing contradiction between that which the Cork Committee intended about 25 years ago and the case law based on this legislation. An investigation into the historical background reveals that English avoidance law is mainly based on dishonest dealing of the debtor.