Germany: Treatment of Reimbursement Claims due to Flight Cancellations in German Insolvency Proceedings

According to a ruling by the German Federal Court of Justice (BGH) on 5 May 2022, a passenger's claim for reimbursement due to a flight cancellation in insolvency needs to be established in the schedule of creditors, otherwise it remains a claim for air transport that cannot be enforced in insolvency proceedings if the flight was booked and paid for before the insolvency proceedings.

Background

The Passenger Rights Regulation (Fluggastrechte-VO) regulates the reimbursement of ticket costs for passengers affected by a flight cancellation. The BGH has now decided how insolvency affects such a claim.

The decision of the BGH

The passengers, who had booked and paid in full for a flight before the start of insolvency proceedings, claimed that as the flight had been cancelled after the opening of insolvency proceedings, they should be reimbursed in full plus interest. The BGH ruled that such a claim generally constitutes a non-preferential insolvency claim (Insolvenzforderung) to be filed to the creditors' schedule.

A claim for air transport does not automatically convert to a monetary reimbursement claim under the Insolvency Code (InsO) when insolvency proceedings are opened, but only when the claim is established in the creditors' schedule.

Key takeaway

In certain circumstances, passengers may be able to reach an agreement with the airline's insolvency administration for a suitable alternative flight (although the airline is not obliged to do so). In the meantime, a claim for reimbursement should always be filed and established in the creditors' schedule in good time to avoid losing the claim altogether when insolvency proceedings are terminated.

Find out more

To discuss the issues raised in this article in more detail, please contact a member of our Restructuring & Insolvency team