Insolvency rescission: an expensive aftermath

Insolvency rescission is a cumbersome topic at first glance but is growing in importance for an increasing number of companies. If a business partner is unable to make payments, the insolvency administrator also checks payments from years prior, posing a risk of unforeseen clawbacks. ‘Liquidity planning is then massively undermined,’ says Funk expert Sebastian Kentenich.

Check yout potential risk

Funk expert Sebastian Kentenich emphasises that every company should urgently check their potential risk in terms of insolvency rescission.

For example, there is an increased risk for companies

  • that determine that their customers’ attitudes towards payment are rather lax

  •  that face high probability of failure in the consumer industry 

  • that are key suppliers for customers

Should the postman actually deliver a rescission letter from an insolvency administrator, the recipient should engage a specialist solicitor urgently. Avoiding an insolvency rescission using one’s own means generally does not work.

Two types of models reduce the risk

If your company is at risk, it is a good idea to consider suitable insurance solutions. Funk offers two different models that protect against rescission of payments.

  • One approach is supplementary cover as an add-on to commercial credit insurance. This model allows companies to close the gap to the credit limit, which normally would not be sufficient for covering old payments recovered through insolvency rescission. The insurer then also shares the costs of avoiding rescission.

  • Another approach is taking out independent insolvency rescission insurance. Any amounts to be paid back would then be covered by the insurer. The policy would also cover legal costs resulting from a rescission.

‘An individual consultation can help companies determine which of the two solutions is most suitable for them,’ explains Sebastian Kentenich.



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Sebastian Kentenich Ansprechpartner bei Funk

Sebastian Kentenich