On June 10, 2016, the firm published an alert titled “German Supreme Court Decides on Close-out Netting.”
The German Supreme Court (Bundesgerichtshof – BGH) decided on June 9, 2016 that certain aspects of the close-out netting provisions contained in the German Master Agreement for Financial Derivatives Transactions (a widely used German law-governed standard agreement for financial derivatives transactions similar to the ISDA Master Agreement) violate German mandatory insolvency law and are, thus, unenforceable in the insolvency of one of the counterparties.