Why Fully Pledged GmbH Shares Set Legal Limits to StaRUG – a Restructuring and Reorganization Framework
StaRUG is a powerful instrument for out-of-court restructuring. Its limits, however, become apparent where fully pledged shares in a German limited liability company (GmbH) are involved. In such constellations, economic and legal control over the shares no longer lies with the debtor, but with the pledgee. Any attempt by StaRUG to interfere with the pledgee’s right of enforcement encounters clear dogmatic, constitutional, and liability-related boundaries.
In practice, the Corporate Stabilization and Restructuring Act (StaRUG) has established itself as a flexible tool to address imminent insolvency outside formal insolvency proceedings. Its scope of application is nevertheless often overestimated. This becomes particularly evident in restructurings of companies whose shares are contractually pledged in their entirety. In these cases, the debtor’s restructuring interest directly collides with the pledgee’s in rem secured legal position.
The starting point of any legal analysis is the nature of the collateral. GmbH shares are rights, not tangible assets. Their enforcement is governed by a distinct legal regime under §§ 1228 et seq. of the German Civil Code (BGB) in conjunction with § 15 of the GmbH Act (GmbHG). The Federal Court of Justice (Bundesgerichtshof) has clarified that the insolvency-law power of realization under § 166(1) of the Insolvency Code (InsO) does not apply to rights. This assessment extends systemically into the StaRUG framework. Where even in opened insolvency proceedings no power of realization exists for the administrator, such power cannot a fortiori be fictionalized in a pre-insolvency restructuring proceeding.
The Position of the Pledgee in the Case of Full Collateralization
If a GmbH share is fully pledged, its economic value is allocated to the pledgee. The debtor’s status as shareholder under corporate law is, in this situation, largely hollowed out. The share no longer functions as restructuring substance, but as collateral. Restructuring measures that target such a share therefore risk not achieving a restructuring, but merely temporarily blocking third-party assets.
While StaRUG does provide for stabilization orders that may temporarily prohibit enforcement and realization measures, such interventions are subject to strict requirements. They must be proportionate and must not result in an impermissible impairment of collateral. In cases of one-hundred-percent pledging, there is typically no overriding restructuring interest capable of justifying such interference. The restructuring would not be carried out on the basis of the debtor’s own economic substance, but at the expense of the secured creditor.
Limits of Plan Effects in Restructuring Proceedings
Auch der Restrukturierungsplan bietet keine Möglichkeit, diese strukturelle Schieflage zu überbrücken. Die Einbeziehung eines vollständig besicherten Pfandgläubigers in einen Plan setzt voraus, dass dessen Rechtsposition gewahrt bleibt. Das Prinzip, dass kein Gläubiger durch den Plan schlechter gestellt werden darf als ohne ihn, gewinnt hier besondere Bedeutung. Wird der Pfandgläubiger an der Verwertung gehindert oder auf eine zeitlich gestreckte Quote verwiesen, obwohl ihm die sofortige Pfandverwertung offensteht, liegt regelmäßig eine Schlechterstellung vor.
In addition, company valuations in the StaRUG context are often based on going-concern assumptions. These assumptions lose their foundation where the shares are no longer economically attributable to the debtor. Without control over the shares, the central basis for a viable going-concern prognosis is lacking.
Public Auction as the Legal End Point
Statutory pledge enforcement designates public auction under § 1235 BGB as the standard method. The knockdown constitutes a rights-creating sovereign act that definitively determines value and concludes the realization process. It is precisely this finality that stands in tension with restructuring-law delay mechanisms. Where the legislature has предусмотрено a clear endgame situation, StaRUG must not create a permanent provisional state.
Attempts to postpone the public auction of fully pledged GmbH shares through restructuring measures therefore amount, in substance, to a de facto expropriation. They shift insolvency risk unilaterally onto the pledgee and undermine the systematic coherence of security law.
Practical Conclusion
StaRUG is not a universal remedy. In the case of fully pledged GmbH shares, its reach ends where the pledgee’s right of enforcement begins. Restructuring must not degenerate into a mere delay of lawful pledge realization. For creditors, this means taking a clear position at an early stage and consistently challenging impermissible interventions. For debtors and advisers, it conversely means that restructuring concepts must remain realistic. Where no independent economic substance remains, StaRUG does not replace realization—it merely postpones it, at the cost of significant legal and liability risks.
If you, as a creditor, want to sell your property securely and in compliance with the law, make sure that a public bid is accepted by an auctioneer — whether in person or live online.
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Further articles on the topic
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Sonderrechte des Gläubigers bei Insolvenz des Schuldners
Pfandrechte an Geschäftsanteilen: optimiertes Verwertungsinstrument in der Forderungsrealisierung durch Anteilsverkauf
Pledge of rights — everything you need to know explained. A pledge of rights can relate to things, i.e. physical objects, as well as to rights of any kind, such as company shares, patents, securities, IP rights, domains, licenses or trademark rights.
