wrongful trading
noun · Insolvenzverschleppung
Insolvenzverschleppung for the director’s failure that English law frames as wrongful trading, § 15a InsO, but the mechanisms differ sharply, German law imposes a hard duty to file for insolvency, at the latest three weeks after Zahlungsunfähigkeit or six weeks after Überschuldung, and missing that deadline is a crime, § 15a Abs. 4 InsO, and grounds personal liability to creditors, § 823 Abs. 2 BGB with § 15a InsO. English wrongful trading has no such clock, it asks whether the director carried on with no reasonable prospect of avoiding insolvent liquidation.
Which translation, when
Why
English and German law both punish directors who run a failing company on, but they do it through different machinery, and the words do not line up. English wrongful trading, s.214 Insolvency Act 1986, is a judgment about prospects, a director becomes liable to contribute to the assets if, before insolvent liquidation, he knew or ought to have known there was no reasonable prospect of avoiding it and did not take every step to minimise creditors’ loss. German law instead fixes a hard duty and a hard clock. Under § 15a Abs. 1 InsO the Geschäftsführer or Vorstand must file for insolvency without undue delay and at the latest three weeks after the company becomes zahlungsunfähig or six weeks after it becomes überschuldet. Missing that deadline is the Insolvenzverschleppung, a criminal offence in itself, § 15a Abs. 4 InsO, punished more lightly where merely negligent, and it grounds civil liability to the creditors through § 823 Abs. 2 BGB, § 15a InsO counting as a Schutzgesetz, with new creditors who dealt with the company after the deadline recovering more than old ones. There is also a separate liability for payments the director lets out after insolvency has matured, § 15b InsO. So Insolvenzverschleppung is not a prospects test but a missed-deadline offence, and rendering wrongful trading by it imports a three-week clock and a criminal charge the English concept does not carry.
Typical mistakes
- Insolvenzverschleppung is a missed-deadline offence, § 15a InsO, not a prospects test, so the director’s exposure turns on whether he filed within three weeks of Zahlungsunfähigkeit or six of Überschuldung, not on whether liquidation was avoidable.
- Late filing is itself a crime, § 15a Abs. 4 InsO, and separately grounds personal liability to creditors, § 823 Abs. 2 BGB with § 15a InsO, so the German director faces criminal and civil consequences the English contribution remedy does not include.
- A further liability attaches to payments made after insolvency has matured, § 15b InsO, so continuing to pay out can expose the director even apart from the late-filing claim.
What matters
Director-liability questions in a German subsidiary meet a hard filing duty, not a prospects test: § 15a InsO requires a petition within three weeks of Zahlungsunfähigkeit or six of Überschuldung, and missing it is both a crime and a ground of personal liability. The advice treating wrongful trading as a discretionary contribution has missed the three-week clock, the German director already exposed to Insolvenzverschleppung by the delay itself.
What the machine misses
Wrongful trading has no settled German rendering and machine output tends to translate it literally or reach for Insolvenzverschleppung, which imports a mechanism the English term lacks. Insolvenzverschleppung under § 15a InsO is not a judgment about prospects but the breach of a hard duty to file within three weeks of Zahlungsunfähigkeit or six of Überschuldung, a criminal offence in itself and a ground of personal liability under § 823 Abs. 2 BGB. So a translated wrongful-trading passage can silently attach a three-week clock and a criminal charge to a director whose English exposure was only a discretionary contribution to the assets.
Examples
| to be liable for wrongful trading | für Insolvenzverschleppung haften |
| the duty to file for insolvency | die Insolvenzantragspflicht |
| to file without undue delay | ohne schuldhaftes Zögern einen Antrag stellen |
| the director’s personal liability | die persönliche Haftung des Geschäftsführers |
More notes on these sections
negligence Fahrlässigkeit
bankruptcy Insolvenz
tort unerlaubte Handlung