Federal Court of Justice on the Voidability of Sale-and-Lease-Back Transactions Based on Intent During the Crisis: High Thresholds for Intent to Disadvantage – But Significant Risks in Transactions Involving Shareholders

In its ruling of May 21, 2026 (IX ZR 168/24, WM 2026, 1615), the Federal Court of Justice (BGH) overturned a ruling by the Higher Regional Court of Frankfurt am Main (judgment of Sept. 26, 2024 – 15 U 95/23) and established fundamental standards for the rescission of exchange contracts for consideration based on intent. The case involved a sale-and-lease-back transaction concerning all of the future debtor's business properties with its then-majority shareholder shortly before the latter's departure.

The BGH clarifies that a contract of equivalent value, despite recognized insolvency, does not in and of itself constitute intent to disadvantage a party. At the same time, it identifies numerous circumstances that may indicate intent in transactions with shareholders and related parties, and comments on the suspension of payments as well as the allocation of the burden of proof and the burden of presentation in avoidance proceedings.

Facts: Sale and Leaseback of Business Premises to the Majority Shareholder

Until July 19, 2019, the plaintiff held 87.5% of the shares in the subsequent debtor, a limited liability company (GmbH). At the end of 2018, the company ran into financial difficulties. In an email dated January 30, 2019, the managing director informed the plaintiff that the company had become insolvent. On May 9, 2019, the plaintiff purchased the business premises for EUR 3.5 million and leased them back to the debtor for ten years; it offset EUR 500,000.00 against a claim for loan repayment. On the same day, it sold its shares for EUR 1.00 to the minority shareholders. Following the opening of insolvency proceedings on September 1, 2020, the plaintiff terminated the lease and filed a lawsuit seeking eviction and surrender of the property. The insolvency administrator filed a counterclaim demanding the retransfer of the properties on the grounds of a challenge based on fraud and a challenge to a gift. The lower courts ruled in favor of the plaintiff. The Federal Court of Justice (BGH) reversed the judgment of the Higher Regional Court of Frankfurt am Main and remanded the case for further investigation.

Objection based on avoidance against the claim for restitution and distinction from §§ 134, 133(4) InsO

The insolvency administrator may assert the claim for restitution under § 242 BGB ("dolo agit") as a defense against the claim for surrender under § 546 BGB. However, a challenge to a gift under § 134 InsO is ruled out, as is § 133(4) InsO, due to the absence of direct prejudice to creditors.

Indirect Prejudice to Creditors

However, a claim for rescission based on intent under § 133(1) InsO may be considered. The indirect prejudice to creditors sufficient to satisfy the elements of the avoidance action exists because the debtor lost ownership of the real property, while the purchase price was partially extinguished by set-off and, for the remainder, had been consumed by the time insolvency proceedings were opened.

Intent to Disadvantage Creditors and Knowledge

It was therefore necessary to examine the debtor's intent to disadvantage creditors and the knowledge of the party against whom the avoidance action is brought. In this regard, the principles governing avoidance based on intent in cases of so-called "congruent coverage" (where a legally justified claim exists) cannot be applied as evidence against intent to disadvantage creditors, since the conclusion of the purchase agreement was not a covering transaction: Prior to the conclusion of the contract, the plaintiff had no claim to the transfer of ownership of the properties. The mere equivalence in value of the performances (which was not disputed here due to the market price of the properties) did not alter this. At the same time, however, the Federal Court of Justice sets high thresholds for establishing the subjective elements of the offense: Knowledge of one's own insolvency is not sufficient in the case of a transaction involving consideration. In addition, there must be special advantages for the contracting party beyond the exchange of performance (such as a set-off situation or an earmarking of funds in favor of the contracting party, related creditors, or jointly liable persons) or special disadvantages for the other creditors (such as a significant disruption to business operations). An attempted restructuring recognized as unsuitable would indicate intent, whereas a coherent and promising restructuring plan would argue against it. A comprehensive assessment of the business is required: short-term liquidity was offset by the loss of the business premises and long-term lease and maintenance obligations. In particular, it must be examined whether the liquidity actually served the purpose of restructuring or merely benefited selected creditors or third parties.

Circumstantial Evidence and Allocation of the Burden of Presentation and Proof

The administrator bears the burden of presentation and proof regarding the circumstantial evidence establishing intent and the inadequacy of the restructuring attempt. Only when the circumstantial evidence supports the existence of intent must the party against whom the challenge is brought demonstrate a coherent, implemented, and promising restructuring plan.

Intent to disadvantage creditors is generally indicated by knowledge of one's own insolvency. Recognized insolvency must generally be demonstrated by a liquidity balance sheet, provided that there has been no suspension of payments (Section 17(2), second sentence, InsO). In the case of a suspension of payments, there is a rebuttable presumption of insolvency. This presupposes outwardly evident conduct that is perceptible to outsiders; internal communication between corporate bodies and shareholders is generally insufficient (unless, for example, the shareholder is also a creditor and is asserting a claim). The email dated January 30, 2019, therefore does not constitute a suspension of payments, but remains a significant indication of a crisis. By contrast, a further email dated April 25, 2019, regarding impending lawsuits by suppliers and a suspension of deliveries could substantiate a cessation of payments.

The following additional indications, in particular, should be taken into account:

• Influence of the majority shareholder (resolution passed despite the managing director's objection)
• Transfer to a related party
• Sale of all real estate necessary for business operations
• Tax-reduced liquidity effect
• Set-off situation
• Possible release of the parent company from letters of comfort
• Simultaneous sale of shares for EUR 1.00
• Earmarking of funds for liabilities with joint liability of the plaintiff or the parent company, 
• as well as a ten-year lease commitment without a buyback option.

A serious restructuring attempt – which might exonerate the company – requires a coherent plan based on the actual circumstances and implemented at least in its initial stages, with a reasonable prospect of success, that analyzes the causes of the crisis and assesses future profitability. Merely raising liquidity or reducing debt is generally insufficient if the causes of the crisis persist. The appellate court had based its decision solely on the need for liquidity – in the opinion of the Federal Court of Justice (BGH), this alone was insufficient.

No Cash Transaction

If the intent was already present at the time of the transaction creating the obligation, the avoidance action also extends to the transfer of ownership. A cash transaction under § 142 InsO is ruled out because the set-off against the existing claim does not constitute equivalent consideration.

Implications for Practice

Market-standard exchange transactions generally remain possible during a crisis; however, sale-and-lease-back transactions with shareholders or related parties entail significant risks. They should be embedded in a documented restructuring plan based on a root-cause analysis and structured on arm's-length terms with an appropriate term. Offsetting against shareholder loans, earmarking of funds in favor of jointly liable third parties, and accompanying transfers of shares require particular caution. Crisis communication must be handled with care, as it remains admissible as evidence. For acquirers and investors, due to the lack of a security function and the inapplicability of the four-year period under § 133(2) InsO, there is thus a risk of restitution for up to ten years under § 133(1) InsO.