Equality in Insolvency: an Inter-City Development

On 25 January 2023 Remko Mooi defends his doctoral dissertation, with the title Without regard to foreignness. The emergence of equal treatment in early modern German insolvency (1648-1806).

In his dissertation Remko Mooi points out that over the course of one and a half centuries several German cities signed agreements amongst themselves ensuring foreign creditors the same rights of access and reward in insolvency proceedings as domestic creditors.

This development was highly important, since before the seventeenth century creditors not having the nationality of the city in which insolvency proceedings were held could not participate or were given a lower rank than indigenous creditors.

Remko Mooi studied letters between cities, as well as treaties. Moreover, he analyzed the administrative practice of cities, thus showing that they provided services of verification of debts. If a creditor of Ulm, for example, was involved in an insolvency proceeding organized at Frankfurt, the judges in Frankfurt relied on an assessment of their colleagues in Ulm as to the veracity and size of the creditor's debt.

Part of the Frankfurt fortifications

Remko Mooi has gone a long way in detailing the causality underlying the mentioned phenomena. He argues that economic incentives were important (cities granted rights to foreign creditors in the anticipation that their creditors would receive the same rights). However, these economic reasons were not the only ones. Remko Mooi demonstrates that the breeding ground of legal scholarship (the Deutsches gemeines Recht) was crucial because there notions on reciprocity started to emerge, and this since the early 1600s.

This went in tandem with administrative practices of German cities. There was a growing trend towards the policing and managing of aspects of international trade, from these cities. Remko Mooi's dissertation challenges the argument that it was mainly competition that created open access institutions. With regard to insolvency, cooperation seems to have been a mechanism that was more important.