Fil Rouge : Setoff of Claims and Insolvency Proceedings

Can claims be extinguished through set-off when one of the companies is facing financial difficulties?

In this new episode of our Fil Rouge series, the ADVANT Altana Restructuring team examines a common mechanism in business law, one whose effects become particularly significant when a company enters insolvency proceedings: the set-off of claims.

What happens to set-off when the payment of claims is, in principle, frozen by the freeze on prior liabilities?

The answer depends, in particular, on the date the claims arose, whether they are related, and the legal framework of the relevant proceeding.

In this Fil Rouge, our attorneys break down the key mechanisms to understand and the situations in which set-off may still be possible despite the initiation of insolvency proceedings.