In a final ruling dated 6 March 2019 (Case ref.: 5 O 234/17), the Regional Court of Wiesbaden decided that the insolvency administrator and all insured persons are not entitled to claim insurance coverage for claims attributable to an insurance period for which the insolvency administrator has chosen not to fulfi l the D&O insurance contract.
The background to this decision is the insolvency administrator’s so-called right to choose performance pursuant to section 103 German Insolvency Statute. In accordance with this provision, the insolvency administrator may choose whether or not to fulfi l mutual contracts which have not yet been entirely fulfi lled by both parties. If he chooses performance, he must pay the outstanding consideration (i.e. the insurance premium) and is personally liable for any non-fulfi lment in accordance with sections 60, 61 of the German Insolvency Statute. If he decides not to perform, he is irrevocably bound to this and can no longer demand performance from the contractual partner.
In the event in dispute, three plaintiffs (the same insolvency administrator for three insolvent group companies) demanded direct payment from the D&O insurer upon assignment of the alleged claims for indemnifi cation of the two insured persons. The insured events occurred upon receipt of the out-of-court claims of the two managing directors in December 2014. Previously, however, the premium for the last insurance period from 1 January 2013 to 1 January 2014 had not been paid and the insolvency administrator notifi ed the D&O insurer within the running
insurance period that he chooses non-performance in accordance with section 103 of the German Insolvency Statute. The Regional Court of Wiesbaden dismissed the action on the above mentioned grounds among others. Furthermore, it rejected the insolvency administrator’s request to assign the claims not to the last insurance period but rather to the last paid insurance period. According to the insurance conditions, an insured event which occurs during the additional notifi cation period – as was the case at hand – was exclusively to be allocated to the last actual insurance period. In addition, the ruling contains remarks on the deliberate breach of duty in connection with granting loans as well as on delays in applying for insolvency, qualifying each as breaches of cardinal duties.