Items from insolvency estates often include companies, shareholdings as well as real estate. The duties of an insolvency administrator include, among other things, achieving the best possible realisation of an insolvency estate in the interests of the creditors.
Depending on the nature of the object, realisation of the insolvency estate requires both the insolvency administrator and the purchaser to have special legal knowledge of the object and its legal circumstances as well as knowledge of the form of the transfer. In addition, features of insolvency law in purchase from insolvency must be recognised and taken into account in the drafting of contracts.
The following questions in particular may arise in cases of purchase from insolvency: What security interests exist that pertain to the object to be sold from the insolvency estate? Does the security interest in the object give rise to special rights for the security creditor, for example in the form of rights of segregation or rights to separate satisfaction? How are the creditors of these security interests to be involved in the sale and, if necessary, how are their rights to be removed from the purchase price? How should creditors in the insolvency proceedings and the insolvency court participate and be involved in the execution of the contract? Does a buyer of objects from insolvency have special rights, such as special termination rights vis-à-vis suppliers, utilities or tenants? Is a buyer or the object purchased from insolvency liable for the debts of the insolvency debtor? What differences exist insofar as to a purchase from a solvent seller? What rights exist after the purchase vis-à-vis the insolvency administrator as the seller or vis-à-vis the insolvency debtor (who is generally not involved in the conclusion of the contract)? Which structure should be considered for the purchase, also in light of the answers to these questions – asset deal or share deal?
Our insolvency administrators and lawyers at LEONHARDT RATTUNDE have extensive expertise in the sale of assets from insolvency estates from their many years of working in insolvency administration in a large number of insolvency proceedings. The many forms insolvency proceedings that we have been involved in has given us a corresponding range of experience regarding the challenges posed by purchase from insolvency. We have experience in structuring of contracts as well as handling special business assets to be sold, whether in the mass realisation of business assets by auction or in the individual realisation of special assets such as film licenses, art collections, livestock, food production facilities, medical facilities and special real estate such as hotels, shopping centres, cinemas, production sites or “stranded” property development projects.
The notaries at LEONHARDT RATTUNDE are familiar with the demands of insolvency-specific contract drafting thanks to their legal support of the firm’s insolvency administrators. They are also on hand to give notarial support for transactions involving insolvency proceedings that are not handled by the firm’s insolvency administrators.
Building on the experience of our insolvency administrators, lawyers and notaries and thanks to their expertise in insolvency law, M&A transactions and real estate transactions, our lawyers at LEONHARDT RATTUNDE are also able to provide legal advice to purchasers in complex acquisition transactions resulting from insolvency.
We are familiar with the peculiarities of insolvency purchases from our daily practice and are therefore ideally suited to act as advisors for both insolvency administrators and for purchasers.