Realization of receivables by means of pledges of rights.
Short-term realization of receivables
If the pledge on the part of the pledgee and the pledger is based on a commercial transaction (transactions between merchants), a public auction may be held after one week in accordance with § 368 HGB. This also applies to commission agents, forwarding agents, carriers, freight forwarders and warehouse keepers. In the case of the latter, even if the contract is only a commercial transaction on their part. However, the notification period of 14 days must be taken into account. In the case of perishable goods or if there is imminent danger, a shortening of the deadline can be requested from the public order office.
Otherwise, the pledgee may have the property realized after one month in accordance with § 1234 BGB.
Legal, legally compliant and fair
Implementation in accordance with the law protects the rights of creditors and debtors and avoids expensive legal disputes The sale of pledges as prescribed by law gives you as a creditor the necessary legal certainty. In order to ensure legal certainty, the legislator privileges the sale of pledged assets by public auction or private treaty sale. 14 good reasons why you should involve us:
Reliability of the estimate: The Higher Regional Court of Cologne assumes the reliability of the estimate by the auction house operated by a generally publicly appointed, sworn auctioneer. This judgment is relevant for the valuation of collateral.
Warranty exclusion: According to the BGH ruling of November 9, 2005, the generally publicly appointed, sworn auctioneer can exclude any warranty for all items sold by way of the “public auction” conducted by him.
Acquisition in good faith: Normally, the 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. Whether construction machinery, works of art or cars: According to § 935 para. 2 BGB, however, all items purchased by public auction are acquired in good faith.
Proven procedure for the review of retention of title claims, taking into account expectant rights. In the case of sales under sections 372 to 380, 382, 383 and 385 of the German Civil Code (BGB) due to default of acceptance, any retention of title claims by third parties are excluded. According to 885 a ZPO Tenancy Law Amendment Act, the landlord can now have the property sold in accordance with §§ 372 to 380, 382, 383 and 385 of the Civil Code. This means that any claims for retention of title by third parties are excluded. There is no threat of auction in this case.
Priority principle: Insolvency administrator and creditor are in competition. The creditor strives for a prompt realization of its secured claims that covers its claims. The insolvency administrator’s efforts are aimed at enriching the estate, at easily implementable realization measures — and, in the economic interest of the insolvency administrator, at covering his own costs and fee claims. In the event of insolvency, the priority principle applies. If the creditor succeeds in asserting his pledge of rights in good time one month before the opening of insolvency proceedings, taking into account all legal requirements, the insolvency administrator is left out in the cold in accordance with Section 88 InsO. The creditor can have the property realized himself. If the realization of the collateral has already taken place before the opening of insolvency proceedings, an action for rescission by the insolvency administrator on the grounds that the assets have been lost due to the realization costs or the lump-sum assessment costs will come to nothing (see: BGH judgments of 20.11.2003 and 23.09.2004).
Cash principle, Section 1238 BGB (1): This is particularly important if the debtor is threatened with insolvency. If there is no intent pursuant to section 133 (1) of the InsO, no setback by the insolvency administrator is possible.
Confidentiality: The generally publicly appointed, sworn auctioneer is obliged to maintain confidentiality vis-à-vis third parties with regard to knowledge acquired in the course of his activities.
No right of rescission for the pledge buyer: In the case of sale by public auction, the buyer has no right of rescission from the purchase contract. Upon acceptance of the bid, ownership of the item with all rights and obligations is irrevocably transferred to the buyer.
Surrogate principle: A lien is realized according to the surrogate principle. This means that the material value is converted into monetary value. The possible market price for this time and place is determined. If the realization of the lien is carried out in accordance with the regulated procedure, there can be no accusation of dissipation. A realization to only one buyer for 1 (one) euro is also a lawful realization.
Regulated procedure: Public auctions or private sales in the case of pledge and distress sales must be conducted by a generally publicly appointed, sworn auctioneer (legal definition in accordance with Section 383 (2) BGB). This is regulated in this way because the respective owner of the auctioned property cannot influence the price and minimum bid and must be able to rely on the reliability and expertise of the auctioneer. This ensures that the sale is carried out in accordance with the procedures set out in the German Civil Code (BGB), Commercial Code (HGB), Code of Civil Procedure (ZPO), Compulsory Administration Act (Zwangsverwaltungsgesetz), Limited Liability Companies Act (GmbHGB), Stock Corporation Act (AktG) and Auctioneers Ordinance (Versteigererverordnung), etc.
Fair processing: The generally publicly appointed auctioneer is sworn to perform his duties conscientiously and impartially. He must protect the rights of all parties involved in the proceedings, including the creditor, debtor and buyer. The relevant provisions of the German Civil Code (BGB), Commercial Code (HGB), Code of Civil Procedure (ZPO), Forced Administration Act (Zwangsverwaltungsgesetz), Pawn Loan Ordinance (Pfandleihverordnung), Limited Liability Companies Act (GmbHGB), Stock Corporation Act (AktG) and Auctioneer Ordinance (Versteigererverordnung) must be observed. In the case of non-performing contracts, it is time-consuming and cost-intensive for the creditor to realize the claims via the usual legal channels of dunning, legal action or insolvency proceedings. The holders of pledges of rights have special rights in this case. They can apply a simplified procedure for the realization of claims.
Simplified procedure: Apart from the case of Section 371 (3) HGB, the realization of the pledge is not dependent on the pledgee having an enforceable title against the owner. This makes the proceedings less expensive and considerably accelerates them. This is in the interests of both creditor and debtor. However, because the debtor’s rights are not verified by court proceedings, the legislator prescribes realization by authorized persons as a supervisory body.
Legal settlement: It is important to note that an object taken in pledge is not the property of the creditor! A creditor may not dispose of it as he sees fit. Third parties may have legitimate claims of which the creditor is unaware! The debtor has the right to have the pledge sold in accordance with the statutory provisions of the pledge of rights.
Important to know: 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, section 1235, section 1237 sentence 1 or section 1240 are violated. The realization of a lien that does not comply with the law may have consequences under civil and criminal law.
Regulatory authorities and the Chamber of Industry and Commerce: We register every auction with the relevant regulatory authorities and the Chamber of Industry and Commerce for inspection.
