Insolvenzabwehr mittels Patronatserklärungen

This paper examines how “internal” and “external” letters of comfort affect the statutory grounds for an insolvency filing under Sec. 17 and 19 of the German Insolvency Code (Insolvenzordnung). One focus is on how the commitment to provide funding can be limited (in particular, terminated) under German law. It is demonstrated that the ability to terminate such commitments does not necessarily cast doubt on the insolvency-preventing effect of letters of comfort. In light of recent decisions – notably by the Higher Regional Court of Düsseldorf on the financing of start-ups and by the German Federal Court of Justice in the “Air Berlin“ case (BGHZ 230, 255) – soft letters of comfort are also examined in more detail.