Finan­cial insti­tu­ti­ons — rea­liza­ti­on of com­pa­ny shares and rights

Legal­ly com­pli­ant, fast and final rea­liza­ti­on wit­hout ren­ego­tia­ti­on of pled­ged rights of all kinds — com­pa­ny shares (cor­po­ra­te shares), secu­ri­ties, IP rights (trade­mark rights, patents, licen­sing rights), domains — by way of public auc­tion or pri­va­te sale (in the case of exch­an­ge-traded rights) as well as com­pa­ny sale.

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The sale of com­pa­nies or pled­ged rights of all kinds by way of public auc­tion or over-the-coun­ter sale (in the case of shares traded on the stock exch­an­ge) by the publicly appoin­ted and sworn auc­tion­eer is legal­ly com­pli­ant, final, usual­ly within 4–6 weeks — and signi­fi­cant­ly che­a­per than M&A tran­sac­tions, espe­ci­al­ly when sel­ling New­Cos.

The public auc­tion of com­pa­ny shares or other rights is par­ti­cu­lar­ly useful in the event of the dis­so­lu­ti­on of com­mu­ni­ties of heirs or frac­tion­al com­mu­ni­ties and due to cadu­ci­ty or aban­don­ment in order to bring about an equi­ta­ble solu­ti­on.

We are publicly appoin­ted and sworn auc­tion­eers and the­r­e­fo­re act on the basis of a legi­ti­ma­te sove­reign man­da­te. Our accep­tance of a bid is not mere­ly the con­clu­si­on of a con­tract, but a legal­ly bin­ding act of sove­reig­n­ty — final, trans­pa­rent and wit­hout ren­ego­tia­ti­on.

Unli­ke tra­di­tio­nal M&A advi­sors, we are not an inter­me­dia­ry, but an organ of the admi­nis­tra­ti­on of jus­ti­ce. We crea­te the oppor­tu­ni­ty for cre­di­tors and inves­tors to rea­li­ze com­pa­ny shares, rights and assets in a legal­ly com­pli­ant, fast and final man­ner in a tried and tes­ted pro­cess, even in the event of impen­ding insol­ven­cy or in the case of New­Co sales.

We car­ry out:

Accor­ding to Sec­tion 65 (3) of the Ger­man Stock Cor­po­ra­ti­on Act (AktG), the com­pa­ny must sell the shares of share­hol­ders excluded due to non-pay­ment of the con­tri­bu­ti­on. In accordance with Sec­tion 214 AktG, the com­pa­ny must sell the new shares issued from share­hol­der funds after the capi­tal increase that have not been coll­ec­ted by the share­hol­ders after one year. In the event of a capi­tal reduc­tion through a con­so­li­da­ti­on of shares, the stock cor­po­ra­ti­on must sell the new shares issued in place of the shares declared null and void (226 para. 3 AktG).

In all cases, the shares must be sold at the offi­ci­al stock exch­an­ge pri­ce through a bro­ker. If the­re is no stock exch­an­ge pri­ce, the shares must be sold by public auc­tion. (Com­pul­so­ry exclu­si­on of share­hol­ders of a GmbH or AG.

If pay­ment of the amount in arre­ars can­not be obtai­ned from legal tran­sac­tions, the com­pa­ny may have the share sold by public auc­tion. Any other type of sale is only per­mit­ted with the con­sent of the excluded share­hol­der.

The sale of com­pa­ny shares (part­ner­ship inte­rests) such as shares, limi­t­ed lia­bi­li­ty com­pa­nies (GmbH) or limi­t­ed part­ner­ships (KG) some­ti­mes gene­ra­tes bet­ter pro­ceeds than the sale via the usu­al tra­ding venues.

Share deals are play­ing an incre­asing­ly important role. Cre­di­tors can be forced to con­vert their claims into shares (debt-to-equi­ty) even against their will. As a rule, cre­di­tors have no inte­rest in beco­ming share­hol­ders. We offer the desi­red exit by sel­ling the shares at auc­tion.

The­re are advan­ta­ges to acqui­ring com­pa­ny shares out of insol­ven­cy. The buy­er then does not have to assu­me respon­si­bi­li­ty for the insol­vent com­pany’s exis­ting tax obli­ga­ti­ons or other lia­bi­li­ties under com­mer­cial law. The sale can be arran­ged in such a way that all exis­ting lia­bi­li­ties remain with the insol­vent com­pa­ny.

The pri­va­te sale of com­pa­ny shares in insol­ven­cy pro­cee­dings can also be car­ri­ed out by a publicly appoin­ted, sworn auc­tion­eer.

The insol­ven­cy admi­nis­tra­tor must sell the com­pa­ny at the best pos­si­ble pri­ce. If he uses the gene­ral­ly publicly appoin­ted, sworn auc­tion­eer for the sale, this is legal­ly valid due to the sur­ro­ga­te prin­ci­ple. The insol­ven­cy admi­nis­tra­tor does not need to obtain appr­oval from the cre­di­tors’ com­mit­tee, as con­trol is ensu­red by the public auc­tion becau­se the gene­ral­ly publicly appoin­ted auc­tion­eer is sworn to per­form his task con­sci­en­tious­ly and impar­ti­al­ly.

The share­hol­der of a limi­t­ed lia­bi­li­ty com­pa­ny has the right of aban­don­ment if he is unwil­ling or unable to ful­fill an obli­ga­ti­on to make an unli­mi­t­ed addi­tio­nal pay­ment. He can then release his share in the com­pa­ny.

Accor­din­gly, in the event of an unli­mi­t­ed obli­ga­ti­on to make addi­tio­nal con­tri­bu­ti­ons, the share­hol­der can exempt hims­elf from pay­ing the addi­tio­nal con­tri­bu­ti­on deman­ded by making his share available to the com­pa­ny. The share must be sold by public auc­tion

1) In the event of delay­ed pay­ment, the defaul­ting share­hol­der may be issued with a new request for pay­ment within a grace peri­od to be deter­mi­ned, under thre­at of exclu­si­on from the share to which pay­ment is to be made. The request shall be sent by regis­tered let­ter. The grace peri­od must be at least one month.

(2) If the dead­line expi­res wit­hout result, the defaul­ting share­hol­der shall be declared to have for­fei­ted his share and the par­ti­al pay­ments made in favor of the com­pa­ny. The decla­ra­ti­on shall be made by regis­tered let­ter.

(3) The excluded share­hol­der shall remain lia­ble to the com­pa­ny for the loss suf­fe­r­ed by the com­pa­ny in respect of the amount in arre­ars or the amounts of the capi­tal con­tri­bu­ti­on sub­se­quent­ly clai­med on the share.

(1) Each co-heir may demand sett­le­ment at any time, unless other­wi­se pro­vi­ded for in sec­tions 2043 to 2045.

(2) The pro­vi­si­ons of sec­tion 749 (2), (3) and sec­tions 750 to 758 shall app­ly. Each heir may at any time demand the sett­le­ment of the com­mu­ni­ty of heirs, unless the sett­le­ment is excluded in the will or the­re are reasons for post­po­ning it. If the heirs fail to reach an agree­ment on the sett­le­ment, the com­mu­ni­ty shall be dis­sol­ved by sel­ling the com­mon pro­per­ty in accordance with the pro­vi­si­ons on the sale of pled­ges.

(1) Upon the death of a per­son (suc­ces­si­on), their assets (inhe­ri­tance) shall pass in their enti­re­ty to one or more other per­sons (heirs).
(2) The pro­vi­si­ons rela­ting to the inhe­ri­tance shall app­ly to the share of a co-heir (inhe­ri­tance share).

The pro­vi­si­ons on the pledge of rights to mova­ble pro­per­ty also app­ly to the pledge of rights to bea­rer secu­ri­ties.

Bai­liffs work exclu­si­ve­ly in their assi­gned dis­trict and have many dif­fe­rent tasks to per­form. Con­duc­ting public auc­tions is only a small part of their work. In prac­ti­ce, bai­liffs refu­se such an assign­ment — due to func­tion­al incom­pe­tence (alter­na­tively accor­ding to § 191 No. 1 GVGA) — also with the refe­rence that sui­ta­ble publicly appoin­ted, sworn auc­tion­eers are available. Bai­liffs may refu­se wit­hout giving reasons, sec­tion 191 (1) GVGA. See also: OLG Colo­gne, decis­i­on 30.12.1999 — AZ: 7 VA 2/99.

The short-term and best pos­si­ble rea­liza­ti­on of objects or rights of all kinds sei­zed by the bai­liff on the basis of a judgment is often not pos­si­ble or sen­si­ble on site. The requi­re­ment to keep cos­ts to a mini­mum alre­a­dy pre­vents the judi­cial offi­cer from adver­ti­sing the pled­ged object appro­pria­te­ly. On the other hand, attrac­ting natio­nal and inter­na­tio­nal buy­ers and car­ry­ing out col­la­te­ral enforce­ment is cle­ar­ly within the core com­pe­tence of the publicly appoin­ted, sworn auc­tion­eer. The enforce­ment court aut­ho­ri­zes the auc­tion by ano­ther per­son (the auc­tion­eer) at the cre­di­tor’s request. The appli­ca­ti­on must be made by the cre­di­tor. Plea­se cont­act us if you have any ques­ti­ons. We can give you valuable advice from our prac­ti­cal expe­ri­ence.

§ Sec­tion 825 ZPO Other type of rea­liza­ti­on

(1) At the request of the cre­di­tor or the deb­tor, the judi­cial offi­cer may rea­li­ze an atta­ched object in a man­ner or at a place other than that spe­ci­fied in the pre­ce­ding para­graphs. The judi­cial offi­cer must inform the defen­dant of the inten­ded rea­liza­ti­on. Wit­hout the con­sent of the defen­dant, he may not rea­li­ze the object befo­re the expiry of two weeks after ser­vice of the noti­fi­ca­ti­on.
(2) The enforce­ment court may order the auc­tio­ning of a sei­zed item by a per­son other than the bai­liff at the request of the cre­di­tor or the deb­tor.

Auc­tions accor­ding to § 825 ZPO

Pur­su­ant to Sec­tion 825 (2) ZPO, the enforce­ment court may, at the cre­di­tor’s request, order that the auc­tion of pled­ged items be con­duc­ted by a per­son other than the bai­liff. The gene­ral­ly publicly appoin­ted, sworn auc­tion­eer may be appoin­ted to con­duct the auc­tion. The pur­po­se of sec­tion 825 (2) ZPO is, among other things, to enable the auc­tio­ning of a pled­ged pro­per­ty by the gene­ral­ly publicly appoin­ted, sworn auc­tion­eer if the auc­tion by the bai­liff can­not be expec­ted to yield pro­ceeds cor­re­spon­ding to the true value of the pro­per­ty.