Dis­rup­ti­on in col­la­te­ral enforce­ment: what we do that M&A can’t

Dis­rup­ti­on in col­la­te­ral enforce­ment: what we do that M&A can’t

Against the back­drop of heigh­ten­ed sen­si­ti­vi­ty and scru­ti­ny, the ques­ti­on ari­ses why an offi­ci­al public auc­tion pur­su­ant to Sec­tion 1235 of the Ger­man Civil Code (BGB) is chal­len­ging the estab­lished busi­ness model of pri­va­te, nego­tia­ted distres­sed M&A dis­po­sals. Deut­sche Pfand­ver­wer­tung replaces com­plex, cos­t­ly, and advi­sor-dri­ven nego­tia­ti­on pro­ces­ses with a cle­ar­ly regu­la­ted, rules-based, and mar­ket-effi­ci­ent pro­ce­du­re, offe­ring clear fina­li­ty wit­hout post-clo­sing ren­ego­tia­ti­on.
With the amend­ment of Sec­tion 383 BGB (new ver­si­on), the legis­la­tor express­ly desi­gna­ted the publicly appoin­ted and sworn auc­tion­eer as the pri­ma­ry entit­led par­ty for the rea­liza­ti­on of pled­ged assets and ancho­red the vir­tu­al public auc­tion for­mat (online live) in sta­tu­te. Con­tra­ry to the wide­spread myth that public auc­tions are leng­thy and cum­ber­so­me, the oppo­si­te is true.
The auctioneer’s acti­vi­ties are gover­ned, in par­ti­cu­lar, by the rele­vant pro­vi­si­ons of the BGB, HGB, GmbHG, AktG, the Auc­tion­eers Ordi­nan­ce (Ver­stei­ge­rer­ver­ord­nung), the Trade Regu­la­ti­on Act (Gewer­be­ord­nung), and the Anti-Money Laun­de­ring Act (Geld­wä­sche­ge­setz). By con­trast, the rules appli­ca­ble to judi­cial enforcement—such as the ZPO, ZVG, or GVGA—do not app­ly to the pri­va­te-law enforce­ment of secu­ri­ty inte­rests.