Setoff in Bankruptcy by the Defendants against the Bankruptcy Estate

Facts

Bank X. sued the brothers S., who were alleged to have obtained an advantage at the expense of the other creditors through setoff of a claim they had acquired against Y. AG, which was in bankruptcy. The High Court of the Canton of Solothurn dismissed the claim, as it did not see any fraudulent intent on the part of the defendants. The Federal Supreme Court overturned this judgment and upheld the claim of Bank X.

Considerations

The Federal Supreme Court made it clear that for the avoidance of a setoff under Art. 214 DEBA, no intent to deceive is required. It is sufficient that the party setting off the claim intended to obtain an advantage at the expense of the co-creditors that was no longer justified in the given situation. The defendants, as sole shareholders of Y. AG, were aware of its insolvency and could foresee the impending bankruptcy. By obtaining an advantage at the expense of the other creditors through setoff of a claim they had acquired against Y. AG, they acted in an abusive manner. The Federal Supreme Court therefore considered the requirements for avoidance of the setoff under Art. 214 DEBA to be met.

The Federal Supreme Court further stated that it is irrelevant whether the defendants had developed the plan for the setoff together with the trustee. The decisive factor is that…