The Association of Insolvency Administrators and Custodians in Germany (VID) has submitted a detailed statement on the draft bill issued by the Federal Ministry of Justice and Consumer Protection (BMJV). The ministry intends to place the work of insolvency practitioners on an independent statutory footing for the first time. In principle, the professional association welcomes this initiative, as it addresses key concerns already formulated in the association's own key points paper from 2009. These include, in particular, nationwide admission, a central digital register, and the establishment of a dedicated professional chamber.
At the same time, the association calls for corrections in several areas. In the VID's assessment, the draft provisions on oversight, data collection, and the catalogue of sanctions go beyond what is appropriate for professional regulation. Dr Christoph Niering, insolvency administrator and chairman of the VID, stresses that modern professional law must safeguard the quality of practice and strengthen the independence of officeholders without creating unnecessary bureaucratic hurdles and duplicate structures. What is required is a lean professional code that preserves liberal profession status and relies on self-responsibility.
Strengthening self-governance and avoiding duplicate oversight
The planned nationwide Chamber of Insolvency Administrators with a general assembly of all members is supported by the association. However, it must be structured strictly as functional self-governance. Its core tasks should remain limited to professional admission, revocation of admission, as well as education and training. The VID rejects a central register of proceedings at the chamber, arguing that it must not become a data collection point for all insolvency proceedings. Instead of extensive regulatory powers for the ministry, the association calls for strengthened statutory autonomy so that members can regulate professional standards independently within a professional code.
To avoid duplicate structures, the association calls for a clear separation of supervisory powers. While cross-proceedings professional oversight by the chamber could close gaps, supervision of ongoing insolvency proceedings must remain exclusively with the insolvency courts. An additional substantive review by the chamber and a general right of complaint for everyone are rejected. Furthermore, the VID calls for a reduction in the maximum fine from five million euros to at most EUR 500,000, the waiver of register entries for enforcement fines and penalties, and shortened limitation and deletion periods.
Uniform criteria and inclusion of debtor-in-possession management
The professional association sees significant progress in the planned digital admissions register. This is intended to replace more than 190 inconsistent and in some cases legally vulnerable judicial pre-selection lists, make multiple applications superfluous, and ease the burden on junior professionals. At the same time, the VID advocates the binding integration of the established Principles of Proper Insolvency Administration (GOI) into the professional code. However, the association rejects a general obligation for courts to justify every selection decision, at least in consumer insolvencies.
A central point of criticism concerns the lack of regulations on debtor-in-possession management, under which many economically significant major proceedings are conducted. In the VID's view, debtor-in-possession management should in future only be permitted to be ordered if an admitted professional acts as a governing body or general representative for the debtor, for example in the function of a Chief Restructuring Officer (CRO).
- —Anchoring as many statutory requirements as necessary while ensuring maximum professional self-governance
- —Exclusion of duplicate oversight of ongoing proceedings alongside the competent insolvency courts
- —Safeguarding high quality standards while strictly minimising bureaucratic effort and costs
- —Creation of uniform criteria for professional admission while preserving independence as a liberal profession
For junior professionals, the association calls for fair conditions without disproportionate examination barriers, whereby examiners from the immediate competitive environment must be excluded. For existing consumer insolvency administrators, grandfathering protection via a corresponding restricted licence is demanded. The legislator should make it unequivocally clear that this is a liberal profession with a legally protected title.
