The German Federal Constitutional Court (BVerfG) will soon issue a decision on the constitutionality of Sec. 56 of the German Insolvency Statute. According to Sec. 56, only independent natural persons can be appointed as insolvency administrators. Thus, accounting firms, law firms, and tax consulting firms cannot act as insolvency administrators. In 2013, a German law firm lodged a constitutional complaint asserting that this provision infringed its right of equality before law as well as its right of occupational freedom.

In response to a request from the BVerfG, the Institute of Public Auditors in Germany issued a letter on 9 March  2015 indicating that it sees no serious difficulties in allowing legal entities to act as insolvency administrators. The institute noted that strict professional codes for accountants, lawyers, and tax consultants would ensure that the responsible representatives of such entities would act independent from any conflicts of interests.

The decision, which is eagerly awaited, is expected later this year. If the BVerfG grants the constitutional complaint, this would create new business opportunities for accounting firms and others and could lead to significant market changes. Insolvency administrators at smaller firms who act as such in their individual capacity strongly oppose the admission of legal entities to serve as insolvency administrator.