The German Federal Court of Justice holds that the presence of State aid elements in the debtor’s capital does not prevent a creditor from challenging a national insolvency procedure (German insolvency procedure)

Factual background The applicant is a liquidator in insolvency proceedings concerning L. GmbH (the debtor, later renamed C. GmbH). The defendant is a publicly-owned bank which focuses on encouraging investment in Thuringia. The debtor was a company manufacturing compact discs in Thuringia since 1990. The defendant granted significant loans to the debtor within the framework of a restructuring plan. In a Decision dated 21 June 2000, the Commission stated that these loans constituted unlawful State aid amounting to DM 166.3 million and ordered Germany to recover the aid with interest. The Land of Thuringia challenged the legality of the Commission's decision before the CFI. Pending the CFI's ruling, C. GmbH paid back the unlawful aid it had received. Shortly after, C. GmbH filed for

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Alix Müller-Rappard, The German Federal Court of Justice holds that the presence of State aid elements in the debtor’s capital does not prevent a creditor from challenging a national insolvency procedure (German insolvency procedure), 5 July 2007, e-Competitions Bulletin July 2007, Art. N° 28794

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