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occurred while the GmbH was overindebted or insolvent, or within
10 days prior to the GmbH’s becoming overindebted or insolvent,
and the other party to the transaction knew of such
overindebtedness or insolvency, and (2) any transaction by the
GmbH, regardless of when such transaction occurred, the purpose
or intent of which was to prejudice creditors, if such
transaction occurred at a time reasonably connected to a
subsequent bankruptcy.
In order to avoid bankruptcy under German law, the owners of
a GmbH are required to endorse a plan aimed at improving the
GmbH’s financial stability as determined under applicable German
accounting principles.
D. Petitioner’s Evaluation of G�nther’s Financial
Condition
Faced with G�nther’s catastrophic net loss for FYE April 30,
1992, petitioner’s management considered its options with respect
to G�nther. It ascertained the fair market value of G�nther’s
assets, looking for any asset whose fair market value so exceeded
its book value that the asset might be converted into cash to pay
down bank loans Flint had guaranteed. It attempted to identify
any liabilities not reflected on G�nther’s books that could arise
if G�nther were sold or liquidated or if G�nther were forced into
bankruptcy. Most importantly, petitioner analyzed available
options in order to ascertain which option would result in the
smallest financial loss to petitioner from G�nther’s financial
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