It is getting quite boring to announce record after record in the German economy: From DAX to employment and from industrial output to ifo – record-highs everywhere. We Germans are not accustomed to such a lengthy period of record-growht. There are, however, not many pessimists left now who are willing to predict any sort of crisis. And I am currently at least not one of them. First, let’s look into the German economy with the help of several key indicators:
In another blow to the attempts of the German legislative and executive authorities to maintain some reliability on the German turnaround playing field, the German Federal Tax Court (“Bundesfinanzhof” (BFH)) maintained in a decision issued on 23 August 2017 that the so-called “Decree on Turnaround” (“Sanierungserlass”) could not even be upheld for cases which were filed with the tax authorities prior to the publication of the said BFH-decision (to declare the Sanierungserlass nil and void, cf. here for further details) on 9 February 2017.
Recently, German gazettes have been well-filled with reports of corruption in involving German companies: the former director of the Sparkasse / Bonn (among others) faces bribery charges surrounding the subsequent use of the Cologne exhibition halls for the tv-channel-group RTL (here). Furthermore, several (!) high-ranking managers of Adidas seems to have promised US-high-school athletes money to convince them to play at certain universities (here). However, the current highlight of the discoveries is undoubtedly Airbus: the group is said to be involved in bribery payments in connection with aircraft sales (here). In the public, and also in the aforementioned press reports, the main focus is on the offenders. This should not obscure the fact that the companies concerned can also suffer severe economic damages. However, a recent ruling by the Federal Court of Justice (BGH) could at least point to a risk-minimization …
The German people have elected their new Parliament on 24 September, at least the predictions of one week before were not totally off, with the right-wing “Alternative für Deutschland” gaining 94 seats, the liberal democrats (“FDP”) being back in the seats and everybody else not really achieving the results so badly wished for. The reactions range from “Germany is becoming a normal” to warnings before a new Nazi-Deutschland. Wow!
A recent decision by the lower regional court of Düsseldorf (LG Düsseldorf) in the context of the investigation into the criminal insolvency of Dresden-based ponzi-scheme Future Business (Infinus) provides an opportunity to shed some light on the continuous evolving legal situation regarding contractual debt-subordination.
In the light of current cases, I would like to explain some basic principles regarding a managing director’s personal liability for unfulfilled tax obligations. Early in 2017, the Munster Financial Court had succinctly summarized the current state of the jurisprudence and put a particular emphasis on the fact that even the observation of the German insolvency filing requirements might not prevent the managing director’s personal liability.
Recently, the case of Infinus AG, as before the cases “Comroad” or “Enron“, again proved that criminal employees or managing directors can get companies into a life-threatening crisis. To date, however, especially medium-sized enterprises are often not aware of the fact that the German Criminal Procedure Code provides tools to help victims of criminal offenses to enforce their civil-law claims against the offender(s). The Legislator is now seeking a simplified enforcement of these rights by means of a fundamental reform of the corresponding regulations, which entered into force on 1 July 2017.
Like the weather, which at least in Germany sent some mixed messages about “summer”, the German economy currently sends mixed signals as to its status: