Criminal defence in cases of preferential treatment of creditors and debtors

Protective purpose: safeguarding the insolvency estate and equal treatment

§§ 283c, 283d StGB protect the equal satisfaction of all creditors and, consequently, the insolvency estate. The legislator aims to prevent assets that should form part of the estate in insolvency proceedings from being withdrawn from creditors. Both provisions serve to protect confidence in insolvency proceedings and in the principle of equal treatment. Importantly, attempts are also punishable in both offences.

Preferential treatment of creditors (§ 283c StGB)

Anyone who, as debtor, grants individual creditors an advantage at the expense of others shortly before or during insolvency proceedings may be criminally liable for preferential treatment of creditors. The offence targets only the debtor (in the case of companies, the company as debtor acting through its bodies).

A criminal offence exists in particular where a creditor is granted security or satisfaction which they could not demand at that time or not in that form. Typical examples include:

• Payment shortly before insolvency although the claim was not yet due
• Subsequent provision of security (e.g. mortgage, guarantee) for a previously unsecured, existing claim
• Full satisfaction of one creditor while others remain unsatisfied

By contrast, congruent performances – i.e. those based on due and enforceable claims in the agreed form – are generally not covered. In practice, however, the distinction between congruent and incongruent performance is often contentious and offers important defence levers.

Only the debtor can be principal offender, but third parties may be liable as instigators or accomplices. The favoured creditor is, as a rule, not punishable under § 283c StGB merely by accepting the benefit.

Crucially, the debtor must have certain knowledge of impending insolvency (direct intent); mere conditional intent is insufficient on that point, which is a key defence argument. Moreover, § 283c StGB – like §§ 283, 283d StGB – is only fulfilled if at least one objective condition of criminal liability is met:

• Cessation of payments, or
• Opening of insolvency proceedings, or
• Rejection of the opening for lack of assets

Whether such a condition is fulfilled must be assessed independently of intent and is often decisive for criminal liability.

Preferential treatment of debtors (§ 283d StGB)

Anyone who, as a third party, shields assets of a debtor on the verge of insolvency from creditors may be liable for preferential treatment of a debtor. In principle, any external person can be offender – e.g. relatives, employees or business partners. The debtor is not a suitable perpetrator under § 283d StGB, but may be liable under § 283 StGB (bankruptcy).

The offence covers four main forms of conduct, if carried out with the debtor’s consent or in the debtor’s favour:

• Removing assets (e.g. transfer of ownership, assignment, pledging, relocation abroad)
• Concealing assets (e.g. false statements, deliberate concealment from creditors or insolvency administrator)
• Destroying, damaging or rendering assets unusable, where this contradicts sound business practice (for example, destruction of stock or manipulation of machines without reasonable justification)

Only assets that would, in case of insolvency, form part of the insolvency estate are covered. Whether an asset belongs to the debtor or a third party (e.g. because of retention of title, security assignment, right of segregation) must be examined in detail. This is often central for the criminal assessment and provides defence opportunities based on civil-law qualification.

The law distinguishes between two variants with different intent requirements:

• Variant 1 (§ 283d Abs. 1 Nr. 1 StGB): The offender acts with certain knowledge of the debtor’s impending insolvency (direct intent; mere suspicion is insufficient). For other elements (debtor’s consent, benefit), conditional intent suffices.
• Variant 2 (§ 283d Abs. 1 Nr. 2 StGB): The act occurs after cessation of payments or during ongoing insolvency proceedings or preliminary proceedings. Here, conditional intent is generally sufficient.

Again, the offence is punishable only if one of the objective conditions of criminal liability (cessation of payments, opening of proceedings, rejection for lack of assets) is fulfilled.

Detection and typical investigative measures

Investigations are usually launched in the context of insolvency proceedings, triggered by:

• Notifications from the insolvency court
• Reports and information from the insolvency administrator
• Criminal complaints by creditors or whistleblowers (employees, business partners)

The public prosecutor’s office typically relies on specialised white-collar crime units. Common investigative measures are:

• Analysis of accounts and payment flows
• Evaluation of emails and messenger communications
• Witness interviews within the company
• Searches and seizures at the suspect’s premises, at the company or at third-party premises (§§ 102, 103 StPO)

If you become aware of a search or ongoing investigation, you should immediately seek legal advice and exercise your right to remain silent before speaking to the authorities.

Penalties, particularly serious cases and collateral consequences

For preferential treatment of creditors (§ 283c StGB), the basic penalty is imprisonment of up to two years or a fine.

For preferential treatment of debtors (§ 283d StGB), the basic penalty (§ 283d Abs. 1 StGB) is imprisonment of up to five years or a fine. In particularly serious cases (§ 283d Abs. 3 StGB), the penalty ranges from six months to ten years’ imprisonment. Particularly serious cases typically involve acts motivated by greed or where many people are knowingly exposed to a risk of losing their assets or suffering economic hardship. Whether such a case exists must always be assessed individually; the statutory examples are not exhaustive. For § 283c StGB there is no statutory particularly serious case.

Beyond fines or imprisonment, serious collateral consequences loom, in particular:

• Confiscation of assets (§§ 73 ff. StGB) and provisional asset arrest (§ 111e StPO)
• Inability to hold office as managing director or board member (e.g. § 6 Abs. 2 GmbHG, § 76 Abs. 3 AktG)
• Professional consequences (especially for regulated professions such as tax advisers, auditors, lawyers)
• Professional bans (§ 70 StGB)
• Corporate liability and civil liability risks, including under § 15b InsO

The economic and professional impact of investigations can be massive even before a conviction, which underlines the importance of early criminal defence.

Defence by Galen Rechtsanwälte in cases of preferential treatment of creditors or debtors

The lawyers at Galen Rechtsanwälte advise and defend clients nationwide in white-collar and insolvency criminal law proceedings. We have substantial forensic experience in complex economic cases and in assisting companies and their governing bodies in crisis situations.

Our approach is early, structured and discreet. We clarify the initial situation, obtain access to the case files, and analyse the prosecution’s investigative strategy and evidence. Key defence aspects often include:

• Assessment of (imminent) insolvency and the exact timeline
• Reconstruction of liquidity and maturity profile, including deferrals, instalment agreements and the due date of claims
• Evaluation of restructuring and continuation attempts (existence and quality of going-concern forecasts, secured financing, documentation)
• Assessment of intent allegations, especially the required certain knowledge of insolvency
• Coordination with parallel risks (confiscation and attachment, professional sanctions, civil liability under § 15b InsO), where necessary in cooperation with specialist colleagues (civil, tax, restructuring)

If you become aware of accusations, you should immediately exercise your right to remain silent, refrain from spontaneous statements – including within the company – and contact a criminal defence lawyer without delay. We support you in dealing with investigating authorities, accompany searches and interrogations and aim for a legally robust defence that takes account of evidentiary issues, procedural rights and economic consequences in equal measure.