Lectures and seminars
We offer companies and associations lectures and seminars on the possibilities and advantages of using pledges of rights and on the practical implementation of pledge realizations. You can book us as keynote speakers for congresses and trade fairs.
Liquidations
We carry out the complete liquidation of companies and estates on site at the property. This avoids storage and transportation costs. We auction in its entirety. With the acceptance of the bid, the buyer receives the obligation to clear the property. Items such as works of art, antiques, musical instruments, motor vehicles, jewelry, watches, original designer furniture, porcelain, solid silverware, collections, stamps, coins, books, securities and machines, but only if they are actually of high value, valuable or significant, will be sold separately at a suitable alternative location.
We have thousands of contacts with prospective buyers. The auction process is very simple for the client. We are at your disposal as a proven partner.
Separation and utilization
In the event of insolvency, attachment liens become ineffective. However, the creditor retains the value of the security rights. The pledged items or rights then count as separate assets. In principle, the insolvency administrator has the power of realization in accordance with Section 88 InsO if the creditor has not acquired his pledge of rights one month before filing for insolvency proceedings. It is sufficient for the insolvency administrator’s right of realization that he acquired the property in the application proceedings in his capacity as provisional insolvency administrator and that a prohibition of sale was issued. From this point onwards, he can prevent the property from being handed over to the creditor. However, he must have actually taken possession. Indirect possession by the administrator is not sufficient for a realization right.
The creditor must assert his rights to separate satisfaction vis-à-vis the insolvency administrator in writing, specifying the object or right to which the right to separate satisfaction relates.
The insolvency administrator may not demand “segregation fees” from the creditor. The creditor is not obliged to provide information to the insolvency administrator. They do not have to hand over any documents. Even if the insolvency administrator sometimes claims the opposite. The insolvency administrator is often in need of evidence due to the debtor’s chaotic bookkeeping, for example.
The insolvency administrator may freely sell a movable item to which he has a pledge of rights. Before he sells the pledge to a third party, he must inform the creditor entitled to separate satisfaction how and at what price the object or right is to be sold.
Within one week, the creditor has the right to provide evidence of a more favorable realization option or to have such evidence provided. The insolvency administrator must then exercise this option or place the creditor in the same position as if he had exercised the option.
Note from practice: Insolvency administrators sometimes realize assets without further discussions with the creditors entitled to separate satisfaction. If the creditor can prove, e.g. by means of a lien realization report, that higher realization proceeds would have been possible, the insolvency administrator can be held liable for damages.
The insolvency administrator receives a lump sum of at least 9% plus 19% VAT from the liquidation proceeds and further lump sums for the liquidation costs. If the actual liquidation costs incurred are significantly higher or lower than the lump sums, the actual costs incurred are to be applied
Fears on the part of the creditor entitled to separate satisfaction that the insolvency administrator could abuse his right of realization by remaining inactive and not pursuing the sale swiftly are averted by the Insolvency Code through the general duty of realization after the reporting date (section 159 InsO) and, above all, by the fact that the creditor can claim the interest owed from the insolvency estate on an ongoing basis from the reporting date (section 169 InsO). The interest run ends with the payment of the realization proceeds to the creditor. The interest rate depends on the contractual agreements. If the insolvency administrator is in default, default interest can also be demanded.
Release: The insolvency administrator is not obliged to make use of his right of realization. Instead, he can leave the realization to the creditor in accordance with (section 170 (2) InsO). This is expedient if the creditor has more favorable liquidation options, for example because he has commissioned a publicly appointed, sworn auctioneer who is well established in the liquidation of pledges of rights.
Creditor participation in costs: In the event of insolvency, the realization of collateral is associated with costs that reduce the proceeds. They are incurred in determining which items are subject to the respective security agreement, in maintaining the collateral until realization and in the realization itself. If the administrator has left the realization of the object or the claim to the lessor, 4% of the proceeds must be paid to the estate for the costs of determination and 19% of the proceeds must be paid to the estate for value added tax, insofar as this is triggered by the realization at the expense of the estate.
Realization by the insolvency administrator as opposed to realization by the generally publicly appointed, sworn auctioneer generally means considerable financial disadvantages to the detriment of the creditor. The liquidation procedure is beyond the creditor’s control, particularly with regard to the liquidation costs. As a rule, it is not part of the creditor’s core competence to generate the highest bidder within the tight deadline of one week. We have contacts with thousands of potential buyers and can generate buyers at short notice. The creditor should at least take advantage of this opportunity, as there are no costs involved.
In insolvency cases, we are often asked by creditors entitled to a pledge whether we can still help to realize their pledge of rights at short notice. Unfortunately, by then “the child has usually already fallen into the well” and the pledge is in insolvency proceedings. Then, for example, VAT of 19% becomes due, which would not have been payable by the creditor in the event of pre-insolvency realization. We can always best help creditors to realize their claims if they act immediately.
Debtor rights
As a generally publicly appointed, sworn auctioneer, we are sworn to our independence in the proceedings. We are obliged to protect the rights of both the creditor and the debtor.
The owners of pledges of rights are privileged because they do not have to go through the usual legal channels of dunning, legal action or insolvency proceedings in the event of non-payment. They can use a simplified procedure for the realization of claims, whereby the realization of the pledge is not dependent on the creditor having an enforceable title against the owner.
This makes the proceedings more cost-effective and speeds them up considerably. This is in the interests of both creditor and debtor. However, because the debtor’s rights are not reviewed in court proceedings, the legislator prescribes a procedure regulated by the German Civil Code (BGB), Commercial Code (HGB), Code of Civil Procedure (ZPO), Compulsory Administration Act (Zwangsverwaltungsgesetz), Pawn Loan Ordinance (Pfandleihverordnung), Limited Liability Companies Act (GmbHGB), Stock Corporation Act (AktG) and Auctioneers Ordinance (Versteigererverordnung).
Anyone who makes use of the special privileges afforded by the legislator in matters relating to the pledge of rights is consequently obliged to comply with the associated obligations.
The realization of a lien is a sovereign act and may only be carried out by authorized persons such as publicly appointed, sworn auctioneers. As a debtor, you do not have to accept a sale of the pledge by the creditor with offsetting against your debts. You are entitled to have the highest bidder for the pledge determined by an independent body by way of public auction or private sale.
In principle, it should be noted: An object taken in pledge is not the property of the creditor! Cf. section 1244 BGB Unlawful sale (1): The sale of the pledge is not lawful if the provisions of section 1228 (2), section 1230 sentence 2 BGB, section 1235 BGB, section 1237 sentence 1 BGB or section 1240 BGB are violated.
The legislator and the courts leave no shortcuts open when it comes to the realization of liens. Anyone who violates the legal provisions can —
be held liable for damages under civil law; see BGH ruling of 14.07.2010, VIII ZR 45/09 a n d
- be prosecuted for embezzlement in accordance with Section 246 StGB; see, instead of many: judgment of the Higher Regional Court of Hamm of July 8, 2013, Ref. 5 U 111/12.
The following are authorized to conduct public auctions and private sales:
a) Notaries (§ 20 Para. 3 BNotO) with the restriction that they should only auction movable property if this is prompted by the auction of immovable property or by a division of assets notarized or mediated by the notary). Note: Pro-active marketing of auctioned goods by the notary does not generally take place, as marketing is not one of the notary’s core competencies. Optimum proceeds from the sale are therefore unlikely to be achieved.
b) Bailiff (§ 237 GVGA) with the restriction: according to § 249 GVGA paragraph (3) 1, the bailiff must refuse the order if the client has the possibility to commission an authorized auctioneer with the auction and the supervising judge has determined this possibility for the district of the local court). Note: The judicial officer is only active in his district. Conducting auctions is one of many tasks. Supra-regional marketing is not one of his core competencies. Here, too, it is unlikely that the proceeds of sale will be optimal.
c) publicly appointed, sworn auctioneer (legal definition according to 383 BGB) with the following restriction: If the auctioneer is only publicly appointed for certain types of auctions (e.g. for art or stamps), then he may only act within this limited scope. Note: The auctioneer proactively generates prospective buyers, both nationally and internationally. His fees are not based on a scale of fees but are largely determined by the auction proceeds. It is in his interest to convince as many potential buyers as possible to participate in the auction.
If other persons are commissioned, there is no auction within the meaning of § 383 BGB! Furthermore: A sale of pledged property via Ebay and other auction platforms on the Internet is not a public auction within the meaning of the law!
If you have no funds or legal expenses insurance, you can apply for legal aid. If you do not know a lawyer, the bar association responsible for your place of residence will be happy to name a suitable lawyer for you.
For your information: In the event of unlawful collateral enforcement, we, as expert appraisers, prepare lien enforcement reports and can determine the possible proceeds that the sale of the collateral would have generated if it had been lawfully realized.
Publicly appointed, sworn auctioneers
Public auctions or private treaty sales are a sovereign act and are carried out in a regulated procedure. Publicly appointed, sworn auctioneers are generally available for this purpose, as they are authorized to realize all contractual and statutory pledges of rights. This is because the respective owner of the auctioned property cannot influence the price and minimum bid. He must be able to rely on the reliability and expertise of the auctioneer. The auctioneer is sworn to carry out his task
Special features of the public auction
The Higher Regional Court of Cologne assumes the reliability of the estimate of the auction house operated by a publicly appointed, sworn auctioneer. This ruling is relevant in practice for the valuation of collateral. Estimates from auction houses are generally considerably cheaper to obtain than detailed expert reports. According to a BGH ruling of November 9, 2005, the generally publicly appointed, sworn auctioneer can exclude any warranty for all items sold by way of a public auction conducted by him. Normally, the following mandatory principle applies: no acquisition in good faith of lost items, i.e. the buyer cannot become the owner of stolen, lost or otherwise missing items. According to Section 935 (2) BGB, all items purchased by public auction are acquired in good faith.
Public auction
The public auction or private sale of pledged property is a sovereign act carried out in a procedure regulated by the BGB, HGB, GmbHG, AktG, Gewerbeordnung and Versteigererverordnung.
The auction takes place according to the surrogate principle, i.e. material value is converted into monetary value. The market value for the place and time of the auction is determined by public auction. The public must be established. The auctioneer must publicize the auction in accordance with the principles of Section 6 (1) VerstV. The auction location must be sufficient.
Before the auction, all prospective buyers must be given the opportunity to inform themselves about the items or rights to be auctioned.
The circle of buyers is unlimited. With the exception of the auctioneer, his employees, assistants and direct relatives, any person with full legal capacity under German law has the right to participate in the auction. This applies in particular to debtors and creditors.
With the amendment of § 383 BGB, public auctioneers are named first for the execution of public auctions and private sales. In exceptional cases, bailiffs or notaries carry out lien realizations with restrictions. In practice, they generally refuse to do so.
a) Notaries (§ 20 para. 3 BNotO) with the restriction: The notary may only conduct a public auction if he issues a notarization in this case.
b) Bailiff(§ 237 GVGA — only in his local district. With the restriction: According to § 249 GVGA paragraph (3) 1, the judicial officer must refuse the order if the client has the possibility of commissioning an authorized auctioneer with the auction and the supervising judge has determined this possibility for the district of the local court). Note: The judicial officer is only active in his district. Conducting auctions is one of many tasks. Supra-regional marketing is not one of his core competencies. Here, too, it is unlikely that the proceeds of sale will be optimal.
c) publicly appointed, sworn auctioneer (legal definition according to § 383 BGB). With the restriction: If the auctioneer is only publicly appointed for certain types of auctions (e.g. for art or stamps), then he may only act within the scope thus restricted. The core competence of the generally publicly appointed, sworn auctioneer is the realization of objects and rights of all kinds arising from pledges and insolvency. Note: The auctioneer proactively generates prospective buyers both nationally and internationally. His fees are not based on a scale of fees but are largely determined by the proceeds of the auction. It is in his interest to convince as many potential buyers as possible to participate in the auction.
