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Pledge of rights of forwarders, warehouse keepers, carriers and shippers
Freight forwarders, warehouse keepers, carriers and shippers are privileged by the legislator in accordance with the HGB and BGB. The legislator grants them a pledge of rights and a right of realization in accordance with §§ 464, 475 b, 495, 440 of the German Commercial Code (HGB) to the items in their possession from the debtor. These pledges of rights arise by operation of law.
Choosing the right enforcement path is critical.
The selected enforcement route has a material impact on recoveries, costs, and the timing of repayment, particularly where freight forwarders have actual possession of pledged goods.
Insolvency administrators often urge creditors to hand over the inventory or let the estate control the realization process, typically with assurances of an efficient and value-maximizing outcome. The commercial reality is different: gross sale proceeds are not the same as net creditor recoveries. In a bulk disposition yielding EUR 500,000 to EUR 1 million(from goods with an original MSRP of EUR 2.5 million), aggregate realization costs can easily absorb 12% to 26% of gross proceeds, including InsVV-based administrator fees (with uplifts), broker costs, storage charges, and related out-of-pocket expenses. Timing is also material: closing usually requires two to five months, while actual remittance to the secured creditor often takes four to eight months or more, given the need for final cost settlement, verification of separate satisfaction rights, court authorization, and possible disputes over retention-of-title interests.
The same applies to realization specialists and M&A advisors: structured bidding processes or package sales are typically associated with substantial fee arrangements and prolonged execution timelines, while liability exposure and warranty claims remain in place.”
Bid processes are not “public auctions” as contemplated by the governing statutory framework. Where a bid process is used to enforce pledged assets, the realization is legally defective and non-compliant. Such enforcement is susceptible to challenge by the debtor and, especially, by the insolvency administrator. The consequence may be civil liability in damages for the secured creditor and, depending on the facts and the manner of implementation, potentially criminal liability as well.
Where a bid process is used outside the statutory enforcement framework, the entire cost burden remains with the secured creditor. In particular, this includes the retainer fees typically incurred during the process and any success feepayable upon completion. Such costs are not recoverable out of the realization proceeds and may not be offset against amounts otherwise distributable from the enforcement.
The position is markedly different in the case of a public auction conducted by a publicly appointed and sworn auctioneer. As a rule, the process can be completed within three to four weeks, requires only a modest publication charge and a tiered declining buyer’s premium, and results in an irrevocable, court-defensible value determination. It also enables prompt disbursement of proceeds, typically delivers stronger net recoveries for the secured creditor, and accelerates the release of warehousing capacity. Of particular significance are the contained liability profile, the effective exclusion of warranties, and the finality of the process, without subsequent renegotiation. Where the creditor is already in possession of the pledged goods, that route should not be surrendered without compelling reason.
Why hesitant receivables management can be expensive
Even before insolvency, many businesses refrain from taking decisive enforcement action on overdue receivables—whether out of caution, uncertainty, or the mistaken expectation of voluntary payment. What is often missed is that receivables are not static assets: their economic value erodes day by day.
Late payment is not just a matter of opportunity cost; it is a direct threat to financial stability. Capital trapped in unpaid receivables is unavailable for investment, liquidity management, or the servicing of the company’s own obligations. At the same time, the risk of non-collection increases with every delay—through insolvency, asset dissipation, or simple passage of time.
Under Section 43(1) GmbHG, managing directors are under a duty to mitigate loss. Anyone who delays or fails to pursue realizable receivables is acting not only against sound commercial judgment, but also at the edge of personal liability. The law does not call for patience; it calls for action. Enforcing available collateral, exercising pledge rights, and, where necessary, proceeding immediately to public auction are not matters of discretion, but of duty.
Responsible receivables management means taking action before value erodes. Anyone who loses months waiting for voluntary payment may ultimately be forced to take substantial write-downs—and to explain that inaction to shareholders, creditors, or supervisory bodies.
Alternative: Auction in accordance with § 825 ZPO
An auction can also be held by a publicly appointed, sworn auctioneer instead of a bailiff for claims that have already been enforced.(Detailed information > here.)
Advantages:
- Faster implementation: bailiffs are very busy; auctioneers are specialized.
- Better sales proceeds: Auctioneers have a broad network of buyers — both nationally and internationally.
- Efficiency for the client: faster realization means higher proceeds and a lower debt burden for the debtor.
Further information on the shipping lien — shipping lien law — shipping lien auction: > Blog post “Shipping lien law — so that the crisis does not become a catastrophe”.
Advantages of collateral enforcement:
- No legal costs for dunning and legal proceedings
- No enforcement costs
- Fixed auction date that cannot be postponed
- Trigger for the debtor’s higher willingness to pay
- Short-term implementation
- Low loss in value of the seized goods due to prompt sale
- Higher proceeds compared to realization by the insolvency administrator
- Short-term clearing of blocked storage areas
We specialize in the realization of receivables for the transport and warehousing industry
Legally compliant procedure
Identification and selection
Commercial expertise in generating suitable prospective buyers, nationally and internationally, for higher auction proceeds
Pool of prospective buyers
Maximum legal certainty
Many years of experience
Time and cost savings
Pledge of rights according to § 446 HGB Forwarding lien
Pledge of rights pursuant to Section 475 b HGB Warehouse keeper’s lien
According to § 475 b HGB, the warehouse keeper has a legal pledge of rights to the goods due to the storage costs. The prerequisite for this is that he is in possession of the goods, in particular that he can dispose of them by means of bills of lading, consignment bills or warehouse receipts (see Marx/Arens Der Auktionator, 2004, p. 274).
Pledge of rights according to § 440 HGB Carrier’s lien
According to § 440 HGB, the carrier has a statutory lien on the cargo for all claims arising from the contract of carriage and customs duties as well as according to §§ 26 and 27 BinSchG in conjunction with § 440 HGB. § 440 HGB a statutory pledge of rights. The prerequisite for this is that he is in possession of the goods, in particular that he can dispose of them by means of bills of lading, consignment bills or warehouse receipts (see Marx/Arens Der Auktionator, 2004, p. 274).
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.
Quick guide for freight forwarders
Realization of freight forwarder’s lien in the event of insolvency
1) Immediate situation (what applies if the client is insolvent?)
- Only communicate with the (provisional) insolvency administrator after filing for insolvency.
- Separate receivables:
- - Claims before application/opening = insolvency claims → register in the table.
- - Claims after opening only if the administrator is newly appointed = liabilities of the estate.
- Time factor: The earlier ownership is secured and realization initiated, the higher the proceeds/ratio.
2) Forwarder’s lien — origin and core requirement
- Arises by operation of law on the goods handed over to you within the framework of forwarding/freight/warehousing relationships.
- No “assertion” necessary for the creation; possession of the property is decisive.
- Possession: Pledge of rights only exists as long as you are in direct possession of the property.
- Surrender = pledge of rights practically lost (except in narrow special cases).
3) Who may exploit? (Priority = direct possession)
- Principle: If the insolvency administrator has direct possession, he shall realize the assets for the account of the person entitled to separate satisfaction in accordance with Section 166 (1) InsO.
- If you have secured direct possession in an insolvency-proof manner, you realize the property yourself.
- Priority principle: Whoever has direct possession in insolvency first controls the realization.
4) Section 88 InsO / “1‑month window”
- Insolvency-related collateral is ineffective.
- If direct possession with a pledge of rights is realized in an insolvency-proof manner no later than 1 month before the insolvency application is filed, the administrator has no power of realization.
- Practical: secure possession in good time and exclude access by the debtor before the (provisional) administrator takes possession.
5) Type of utilization — what is legally compliant?
- Standard case: public auction in accordance with §§ 1228 ff., 1235 BGB by a publicly appointed, sworn auctioneer.
- Sale by private treaty only in exceptional cases:
- - if an objective stock exchange/market price exists (broker/authorized person), or
- - if there is an explicit, effective agreement.
- Liability pitfall: Freehand sale or “M&A auction” without grounds for admissibility is unlawful and subject to avoidance/liability.
6) Practical note (interests of the insolvency administration)
- Administrator’s remuneration depends on proceeds from the insolvency estate → Incentive to keep separate assets in the insolvency estate.
- Expect resistance if you want to recycle yourself.
- Antidote: present fast, documented better utilization.
7) If the administrator liquidates — your rights
- The administrator must inform you before the sale (intention to sell, route, price).
- 168 InsO: You can provide evidence of a better utilization option within 1 week.
- If the administrator does not use them, he must place you in the same economic position as if he had used them.
8) Do’s — concrete roadmap for freight forwarders
- Do not surrender as long as the claim is outstanding and a pledge of rights applies.
- Immediately in writing to the (provisional) administrator: notify the right to separate satisfaction, specify the property, quantify the claim, set a short deadline.
- Create inventory/condition documentation (photos, serial numbers, papers, storage location).
- Mandate a publicly appointed auctioneer and schedule the auction.
- In the event of time criticism/decline in value: submit fire sale/auction proposal with revenue forecast immediately.
9) Don’ts — typical mistakes
- Publication “on demand”.
- Sale on the open market without a market price or without an effective agreement.
- Only verbal agreements.
- Delay utilization — proceeds fall, areas remain blocked.
10) How we typically work
- Pledge realization appraisal to determine the value and to argue for proceeds on request.
- Legally compliant public auction with a large network of buyers.
- Short-term public auction to enforce a better realization against the administrator.
- Result: higher proceeds, faster payout, space quickly available.
Important for your actions
Forwarding lien arises automatically with possession. Whoever holds the direct possession insolvency-proof, realizes — regularly publicly; by private treaty only in exceptional cases.
