Decision of the German Federal Court of Justice on netting arrangements in a financial contract subject to German law
24 June 2016
In a decision of 9 June 2016, the German Federal Court of Justice has ruled that, if parties to a stock option transaction governed by German law entered into a netting arrangement for the event of an insolvency which is contradictory to sec. 104 of the German Insolvency Code, the netting arrangement is void in this respect and the provisions of sec. 104 InsO are directly applicable. This briefing outlines some preliminary conclusions drawn from the decision and the immediate responses from supervisory authorities and the legislator.
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Decision of the German Federal Court of Justice on netting arrangements in a financial contract subject to German law