Set-off in insolvency (§§ 94–96 InsO)

§ 94 InsO protects a creditor who was already entitled to set off, by law or agreement, at the moment the case opens: that set-off position is unaffected by the opening of insolvency proceedings. In practice this is a privileged position relative to the principle of equal creditor treatment (par condicio creditorum) — the creditor effectively obtains full satisfaction up to the amount of the counter-claim, instead of only the insolvency quota.

§ 95 InsO extends the protection to conditional or not-yet-due claims once they become due. § 96 InsO, conversely, draws the boundary: set-off is impermissible where the creditor only obtained the possibility through a voidable act, where its debt to the estate only arose after the case opened, or where it only acquired the claim against the debtor from another creditor after learning of the crisis — protection against deliberately circumventing equal creditor treatment.

For buyers, this matters where receivables and payables to the target survive or are transferred as part of an asset deal: before taking on customer receivables, it is worth checking whether the debtor can itself set off a protected counter-claim under §§ 94 f. InsO — that reduces the value actually realisable from the acquired receivable.