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White Paper

The right to set-off during insolvency proceedings

22 March 2018
Mayer Brown White Paper
The rules on set-off under certain circumstances allow to „settle“ a claim with a counterclaim and, thus, to avoid making back and forth payments. In contentious situations, the set-off enables the party pleading the set-off to enforce its own claim in an easy way. This easy form of satisfaction is even available to the creditor in situations where the debtor’s assets have deteriorated. However, in insolvency proceedings special rules apply with regard to set-off which might either make a set-off impossible in a given case or entail the risk of the set-off being subject to avoidance rights by the insolvency administrator. This article provides an overview of the possibility to declare set-off and its limits in the financial crisis of the party against which set-off is declared.

Authors

  • Dr. Marco Wilhelm
    T +49 69 7941 2731
  • Dr. Malte Richter, LLM
    T +49 69 7941 1657
  • Tina Hoffmann
    Associate
    T +49 69 7941 1281
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