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Collateral enforcement due to division
The non-partisan valuation and subsequent distribution of all movable assets and company shares is carried out through the orderly conversion of tangible assets into liquid assets. This is an efficient and legally compliant method for taking all parties involved into account in the shortest possible time and ensuring economically viable solutions.
As part of this realization, a neutral valuation of the assets is carried out in order to properly determine their market value. The sale is then carried out by way of a public auction by publicly appointed, sworn auctioneers, which ensures a transparent and fair process. This procedure avoids potential disputes between the parties involved, enables a fair distribution of the proceeds and at the same time ensures that the assets are liquidated quickly.
The public auction by a generally publicly appointed and sworn auctioneer constitutes a sovereign act. The knockdown in accordance with Section 156 of the German Civil Code (BGB) is a legally formative sovereign act and leads to the binding determination of the value of the auctioned property.
Binding effect for the tax office
Under tax law, the fair market value (§ 9 BewG) is determined on the basis of the price that can be achieved in the ordinary course of business. The hammer price achieved in a public auction generally accurately reflects this market value. The tax office is therefore generally bound by the hammer price.
Case law and administrative practice
BFH, judgment of 17.10.2001 — II R 85/99: The hammer price from a public auction is the fair market value.
Inheritance Tax Guidelines (R B 11.2 ErbStR): In the case of public auctions, the actual proceeds realized must be taken into account.
This method proves to be a legally compliant, efficient and economically optimized solution, particularly in inheritance law disputes, corporate law separations and the realization of collateral in the context of disputes between parties.
Advantages of the realization of liens:
- No legal costs for further legal proceedings
- No enforcement costs
- Fixed auction date that cannot be postponed
- Trigger for possible agreement between the parties involved
- Short-term implementation
- Low loss in value of the items due to prompt sale
- Equitable distribution of proceeds and possible restoration of family peace
We conduct partition auctions on the basis of statutory provisions.
Reconciliation of interests
Identification and selection
Pool of prospective buyers
Legal certainty
Many years of experience
Time and cost savings
No time-consuming and cost-intensive dunning and legal proceedings necessary.
We perform due to:
Partition auction
The non-partisan valuation and distribution of all movable assets and company shares is carried out by converting tangible assets into monetary value. This is the easy way to satisfy all parties in the short term.
Partition auction in accordance with Section 731 of the German Civil Code (BGB) Settlement in the event of partition
In the absence of any other agreement, the division shall be carried out in accordance with Sections 732 to 735. In all other respects, the provisions on community auctions in the event of dissolution of the community shall apply to the division.
Partial auction upon dissolution of the community
Pursuant to Section 753 (1) BGB , the dissolution of the community, pursuant to Section 731 i. V.m. § Section 753 BGB, the provisions on the sale of pledges apply to the dissolution of the community, the settlement between members of the company, the spouses after the termination of the community of property (Section 1477 (1) BGB), the participation in the dissolution of the continued community of property (Section 1498 BGB) and the settlement of the co-heirs (Section 2042 (2) BGB).
If an amicable agreement on the division of the proceeds cannot be reached, the proceeds must be deposited with the depository of the competent local court in favor of the heirs.
Partial auction in accordance with § 749 BGB Cancellation
- Each partner can demand the dissolution of the community at any time
- If the right to demand termination is excluded by agreement for good or for a limited period, termination may nevertheless be demanded if there is good cause. Under the same condition, if a notice period is stipulated, termination may be demanded without observing the notice period.
- An agreement which excludes or restricts the right to demand rescission contrary to these provisions shall be null and void.
Partial auction upon dissolution of the community
Pursuant to Section 753 (1) BGB , the dissolution of the community, pursuant to Section 731 i. V.m. § Section 753 BGB, the provisions on the sale of pledges apply to the dissolution of the community, the settlement between members of the company, the spouses after the termination of the community of property (Section 1477 (1) BGB), the participation in the dissolution of the continued community of property (Section 1498 BGB) and the settlement of the co-heirs (Section 2042 (2) BGB).
If an amicable agreement on the division of the proceeds cannot be reached, the proceeds shall be deposited with the depository of the competent local court in favor of the entitled parties.
Partition auction in accordance with § 753 BGB Division by sale
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If division is excluded by nature, the community shall be dissolved by selling the common property in accordance with the provisions on the sale of pledges, in the case of land by forced sale, and by dividing the proceeds. If the sale to a third party is not permitted, the object shall be auctioned off among the partners
- If the attempt to sell the object is unsuccessful, each partner may demand that it be repeated; however, he must bear the costs if the repeated attempt fails.
Partial auction upon dissolution of the community
Pursuant to Section 753 (1) BGB , the dissolution of the community, pursuant to Section 731 i. V.m. § Section 753 BGB, the provisions on the sale of pledges apply to the dissolution of the community, the settlement between members of the company, the spouses after the termination of the community of property (Section 1477 (1) BGB), the participation in the dissolution of the continued community of property (Section 1498 BGB) and the settlement of the co-heirs (Section 2042 (2) BGB).
If an amicable agreement on the division of the proceeds cannot be reached, the proceeds must be deposited with the depository of the competent local court in favor of the entitled parties
Partial auction pursuant to Section 2042 BGB Settlement of the community of heirs
- Each heir may demand settlement at any time, unless otherwise provided for in Sections 2043 to 2045.
- The provisions of Section 749 (2), (3) and Sections 750 to 758 shall apply.
Each heir can therefore demand the settlement of the community of heirs at any time (Section 2042 BGB), unless the settlement is excluded in the will or there are reasons for postponement. If the heirs fail to reach an agreement on the settlement, the community is dissolved by selling the joint property in accordance with the provisions on the sale of pledges, in the case of real estate by forced sale (ZVG) and by dividing the proceeds (§ 180 ff ZVG). The items are sold in a public auction by a generally publicly appointed, sworn auctioneer. The sale of the items is due at any time, as each participant can demand the dissolution of the community at any time. All members of the community must be notified of the intention to dissolve, i.e. to liquidate, with a sales period of one month. The sale may only take place after the deadline has expired if a public announcement has been made and the parties to the proceedings have been notified.
If an amicable agreement on the division of the proceeds cannot be reached, the proceeds must be deposited with the depository of the competent local court in favor of the heirs.
Questions about:
Manageable costs
We are obliged to carry out the valuation and realization at reasonable costs, taking into account the rights of all parties involved. The amount is based on the type of pledge and the effort required to achieve adequate realization proceeds in the interests of the debtor. As remuneration for his expenses and activities, the auctioneer receives a lump sum from the client and a so-called premium on the hammer price from the buyers. In order to avoid any accusation of squandering, the pledge should be advertised in an appropriate form. The greater the demand for the pledged item, the lower the flat fee.
Important to know: The debtor bears the costs of the proceedings. Unrealizable costs can be claimed as expenses for tax purposes by the creditor.
The Auctioneer shall have unlimited and personal liability for culpable breaches of duty. The client cannot release the auctioneer from this liability for damages. The auctioneer’s remuneration is therefore always also a liability remuneration.
Brief instructions on division in the event of insolvency of a party
(community of heirs / fractional community / company assets)
Principle: Share of the insolvent party
- The share of the insolvent joint member is included in the insolvency estate.
- The insolvency administrator assumes the position of the debtor and exercises the debtor’s membership and sharing rights.
- The administrator can therefore demand the dissolution/division of the community himself (settlement or dissolution).
Consequence: division is driven by insolvency
- The insolvency administrator regularly has a liquidity interest: the share should be turned into cash quickly.
- A partition auction or realization by sale is therefore often carried out if no agreement can be reached quickly.
- Proceeds are distributed according to quotas; internal equalization issues are to be clarified outside of utilization.
Do’s for the non-insolvent members
- Immediate strategy decision:
- - Agreement on sale by private treaty or public auction with professional optimization of proceeds, or
- - Purchase/takeover of the insolvent share from the estate.
- Actively offer revenue optimization: structured, legally compliant market process; public auction as a neutral pricing mechanism.
- Document quotas, ranking and compensation items in advance (costs, utilization, investments, withdrawals).
- Agree in writing with the administrator that the best possible and speedy utilization is sought; use data room/NDA for confidential information.
Don’ts (typical mistakes)
- Do not remain passive: Waiting leaves the pace to the administrator and increases the risk of a distress sale.
- No informal deals without market pricing; this creates liability and consequential dispute risks.
- No delaying tactics without a viable alternative; the administrator can enforce judicial division.
Special case: Insolvency of an entrepreneur/shareholder
- The share under company law is also included in the estate.
- The administrator may demand realization/division insofar as contractually and legally possible.
- Company or contractual obligations (e.g. approval requirements, transfer restrictions, succession clauses) must be strictly observed when realizing assets.
- Practical focus: highest possible proceeds with legally compliant mapping of ties.
Important for your Hnadeln
- Insolvency of a party = administrator takes over its right of partition.
- Structuring the process at an early stage prevents distressed sales and maximizes proceeds.
- Public auction is the neutral instrument for dividing communities into money in a dispute-proof manner.
