Language
DEEN
Market analysis··3 min read

Statutory professional regulation for insolvency administrators: VID comments on draft bill

The Association of Insolvency Administrators and Custodians in Germany calls for revisions to the Federal Ministry of Justice's draft bill for statutory professional regulation.

AI generatedStatutory professional regulation for insolvency administrators: VID comments on draft bill – AI-generated illustrative image
Statutory professional regulation for insolvency administrators: VID comments on draft bill. Illustrative image generated using artificial intelligence (AI). The image does not depict a real property, person or event and is not a documentary photograph. Labelled in accordance with Article 50(4) of the EU AI Act.

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.

Looking for
a real estate
agent?

Michael Freitag — founder of FREITAG® Immobilien
Michael Freitag
Founder of FREITAG® Immobilien GmbH
More than 15 years of experience in Bavaria & surroundings
— FREITAG Immobilien

Your discreet partner for institutional transactions in German-speaking Europe.

As a premium real estate firm based in Munich we advise investors, family offices, developers and long-term holders on the acquisition, sale and valuation of residential, income and commercial properties — confidential, close to the market and on equal terms.

3.600+
municipalities on our market radar
48 h
first assessment of your property
Off-market
discreet circle of buyers
DACH
DE · AT · CH
— Confidential contact

Let us talk about your portfolio.

Acquisition profiles, off-market opportunities, valuations or development enquiries — we reply personally within 24 hours, NDA as a matter of course.

Phone
+49 (0) 89 158 90 140
Email
E-Mail anzeigen
Office
Munich
— More news
— Most read in the journal