The number of overdue payments and insolvencies is rising rapidly.
Companies are reeling. Some entrepreneurs think to themselves: I’ll instruct my lawyer to sue the defaulting debtors. However, this comes at a time when the courts are completely overloaded.
In its article on 02.08.2024, “Die Welt” wrote about the deficits in the German justice system. Germany needs to improve its rule of law, the EU Commission concluded in its “Rule of Law Report 2024”, according to the article in Die Welt. Its legal experts identified shortcomings in the German justice system. As a result, Germany has some homework to do in the area of the rule of law when it comes to the staffing and efficiency of the courts. The “Neue Zürcher Zeitung” wrote in 2023: “There is too much paper and too few staff in Germany’s courts”. According to the newspaper, this is increasingly due to the increase in proceedings for citizens’ benefits at the social court, the wave of asylum claims and rising crime. As a result, there is less and less capacity for the court proceedings that companies are bringing in dunning and legal proceedings.
What is important for you as an entrepreneur is that Germany must — despite progress in the past year — significantly increase the number of judges and public prosecutors in order to achieve European standards. As the newspaper “Die Welt” notes, there is one point in particular that citizens in Germany also find increasingly annoying: Many court cases do not take place at all or take place much later, often years later. Or court proceedings drag on forever because there are too few judges and public prosecutors.
Especially in times of high inflation, prompt judgment and recovery of outstanding claims can be of existential importance for entrepreneurs.
As a rule, non-performing contracts have commercial causes. It is in the nature of things that the best way to find a prompt and fair solution to a problem between business people is through commercial channels.
We do not have a political blog and therefore do not comment on the political circumstances that have led to this misery. We use our many years of expertise to provide practical advice on how to save your own company in turbulent times.
What many people don’t know or no longer have on their radar: There is a simple answer to the problem. In order to obtain a legal hearing, the arbitration procedure of the Chamber of Industry and Commerce can be used as an alternative to conventional legal proceedings. A final, legally binding decision can usually be reached much more quickly in this way than through the conventional dunning and legal proceedings in court. Internationally active companies very often use this option. Entrepreneurs can obtain information and personal advice via the IHK website. This is the right of IHK members. They also benefit from the chamber fees they have paid over the years. Medium-sized companies can also make the involvement of an IHK arbitration tribunal a condition. It simply has to be included as a condition of the legal status in the agreement on the place of jurisdiction. The legislator continues to provide for this possibility of dispute resolution. This relieves the burden on the courts. We are increasingly finding that our clients handle it this way
But there is another effective and efficient way.
The prompt and considerably more cost-effective realization of receivables can be implemented at short notice and out of court via contractual or statutory pledges of rights.
Taking a pledge is the commercial solution instead of the very lengthy enforcement procedure via the bailiff, who works in accordance with the Code of Civil Procedure and the bailiff enforcement regulations.
The law also provides for valuable assets to be deposited with an independent custodian. In the event of default, the assets can then be liquidated at short notice. In any subsequent insolvency proceedings, the insolvency administrator then has no access to the pledged items. In our capacity as publicly appointed, sworn auctioneers, we are sworn to our independence in the proceedings. As a neutral authority, we also offer safekeeping services.
Entrepreneurs are thus regaining some of their commercial freedom.
Please contact us if you have a specific case for a public auction: To the contact form
We have provided an explanatory video to provide information about the assignment: To the explanatory video for clients
Information on the auction process: To the explanatory video for bidders
More videos on the topic:
Build a firewall to secure receivables!
Options for hedging receivables — planning security in advance
