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Insolvency Statute (Insolvenzordnung, InsO)

Insolvency Statute (Insolvenzordnung, InsO) in PDF format (as of 1 January 2004), kindly provided by the Federal Ministry of Justice, but no longer available from their website


 

Promulgated on 5 October 1994, as last amended on 1 January 2002.

Translation provided by the Federal Ministry of Justice and reproduced with kind permission.

Insolvency Statute – Contents

  1. Part One: General Provisions
    1. Section 1: Objectives of the Insolvency Proceedings
    2. Section 2: Jurisdiction of the Local Court as Insolvency Court
    3. Section 3: Local Jurisdiction
    4. Section 4: Applicability of the Code of Civil Procedure (Zivilprozessordnung)
    5. Section 4a: Deferment of the Cost of the Insolvency Proceedings
    6. Section 4b: Repayment and Adjustment of the Deferred Amounts
    7. Section 4c: Rescission of Deferment
    8. Section 4d: Legal recourse
    9. Section 5: Principles of the Insolvency Proceedings
    10. Section 6: Immediate Appeal
    11. Section 7: Appeal on Points of Law
    12. Section 8: Service
    13. Section 9: Publication
    14. Section 10: Hearing of the Debtor
  2. Part Two: Opening of Insolvency Proceedings. Involved Assets and Parties
    1. Chapter One: Prerequisites of Opening and Opening Proceedings
      1. Section 11: Admissibility of Insolvency Proceedings
      2. Section 12: Corporations under Public Law
      3. Section 13: Request to Open Insolvency Proceedings
      4. Section 14: Request by the Creditor
      5. Section 15: Entitlement to Request the Opening of Insolvency Proceedings for Assets Owned by Corporations and for the Assets Owned by Companies without Legal Personality
      6. Section 16: Reason to Open Insolvency Proceedings
      7. Section 17: Illiquidity
      8. Section 18: Imminent Illiquidity
      9. Section 19: Overindebtedness
      10. Section 20: Obligation of Disclosure During the Opening Proceeding, Reference to Discharge of Residual Debt
      11. Section 21: Decisions Ordering Arrestment
      12. Section 22: Legal Status of the Temporary Insolvency Administrator
      13. Section 23: Publication of Restriction on Property Transfers
      14. Section 24: Effects of Restrictions on Property Transfers
      15. Section 25: Repeal of Measures of Arrestment
      16. Section 26: Refusal for Lacking Assets
      17. Section 27: Order Opening the Insolvency Proceedings
      18. Section 28: Requirements Incumbent on the Creditors and Debtors
      19. Section 29: Docketing of Meetings
      20. Section 30: Publication of the Order Opening the Insolvency Proceedings.
      21. Section 31: Commercial Register, Register of Cooperatives and Register of Associations
      22. Section 32: Land Register
      23. Section 33: Ship/Aircraft Register
      24. Section 34: Appeal
    2. Chapter Two: Assets Involved in the Insolvency Proceedings. Classification of Creditors
      1. Section 35: Definition of the Assets Involved in the Insolvency Proceedings
      2. Section 36: Objects not Subject to Attachment
      3. Section 37: Joint Marital Property of a Community
      4. Section 38: Definition of the Creditors of the Insolvency Proceedings
      5. Section 39: Lower ranking Creditors of the Insolvency Proceedings
      6. Section 40: Claims to Maintenance
      7. Section 41: Immature Claims
      8. Section 42: Claims Subject to a Resolutory Condition
      9. Section 43: Liability Incumbent on Several Persons
      10. Section 44: Rights of Obligors Liable Jointly and Severally and of Guarantors
      11. Section 45: Conversion of Claims
      12. Section 46: Recurring Payments
      13. Section 47: Right to Separation
      14. Section 48: Right to Separation Extending to the Consideration Received as a Substitute for the Object of Separation
      15. Section 49: Separate Satisfaction from Immovables
      16. Section 50: Separate Satisfaction of Pledgees
      17. Section 51: Other creditors with a Claim to Separate Satisfaction
      18. Section 52: Elimination of Creditors with a Right to Separate Satisfaction
      19. Section 53: Creditors of the Assets Involved in the Insolvency Proceedings
      20. Section 54: Costs of the Insolvency Proceedings
      21. Section 55: Other Debts incumbent on the Assets Involved in the Insolvency Proceedings
    3. Chapter Three: Insolvency Administrator Bodies Representing the Creditors
      1. Section 56: Designation of an Insolvency Administrator
      2. Section 57: Election of a Different Insolvency Administrator
      3. Section 58: Supervision by the Insolvency Court
      4. Section 59: Dismissal of the Insolvency Administrator
      5. Section 60: Liability of the Insolvency Administrator
      6. Section 61: Nonperformance of Debts incumbent on the Assets Involved in the Insolvency Proceedings
      7. Section 62: Period of Limitation
      8. Section 63: Remuneration of the Insolvency Administrator
      9. Section 64: Determination by the Insolvency Court
      10. Section 65: Empowerment to issue an Order
      11. Section 66: Rendering of Accounts
      12. Section 67: Establishment of the Creditors’ Committee
      13. Section 68: Election of Different Members
      14. Section 69: Duties Incumbent on the Creditors’ Committee
      15. Section 70: Dismissal
      16. Section 71: Liability of the Members of the Creditors’ Committee
      17. Section 72: Decisions of the Creditors’ Committee
      18. Section 73: Remuneration of the Members of the Creditors’ Committee
      19. Section 74: Convening the Creditors’ Assembly
      20. Section 75: Request to Convene a Creditors’ Assembly
      21. Section 76: Decisions of the Creditors’ Assembly
      22. Section 77: Determination of Voting Right
      23. Section 78: Repeal of a Decision taken by the Creditors’ Assembly
      24. Section 79: Information to the Creditors’ Assembly
  3. Part Three: Effects of the Opening of Insolvency Proceedings
    1. Chapter One: General Effects
      1. Section 80: Right to Manage and Transfer the Assets Involved in the Insolvency Proceedings Vested in the Insolvency Administrator
      2. Section 81: Transfers of Property by the Debtor
      3. Section 82: Performance in Favour of the Debtor
      4. Section 83: Decedent’s Estate. Continued Community
      5. Section 84: Liquidation of a Company or a Community
      6. Section 85: Joinder of Pending Actions as Plaintiff
      7. Section 86: Joinder of Certain Pending Actions as Defendant
      8. Section 87: Claims Held by the Creditors of the Insolvency Proceedings
      9. Section 88: Execution prior to the Opening of Insolvency Proceedings
      10. Section 89: Prohibition of Execution
      11. Section 90: Prohibition of Execution under Debts incumbent on the Assets Involved in the Insolvency Proceedings
      12. Section 91: Exclusion of other Acquisition of Rights
      13. Section 92: General Damage
      14. Section 93: Unlimited Liability of Partners
      15. Section 94: Preservation of the Right to Set Off a Claim
      16. Section 95: Acquisition of the Right to Set Off a Claim During the Proceedings
      17. Section 96: Prohibition of Set-Off
      18. Section 97: The Debtor’s Obligation to Disclosure and Cooperation
      19. Section 98: Imposition of the Duties of the Debtor
      20. Section 99: Interception of the Debtor’s Mail
      21. Section 100: Maintenance Payments using the Assets Involved in the Insolvency Proceedings
      22. Section 101: Members of the Body Representing the Debtor. Employees
      23. Section 102: Restriction of a Basic Right
    2. Chapter Two: Performance of Transactions. Cooperation of the Works Council
      1. Section 103: Option to be Exercised by the Insolvency Administrator
      2. Section 104: Fixed-date Transactions. Financial Futures
      3. Section 105: Severable Contracts
      4. Section 106: Priority Notice
      5. Section 107: Retention of Title
      6. Section 108: Continuity of Severable Contracts
      7. Section 109: Debtor’s Status as Tenant or Lessee
      8. Section 110: Debtor’s Status as Landlord or Lessor
      9. Section 111: Sale of Property Let by the Debtor
      10. Section 112: Prohibition to Terminate Tenancy or Lease Contracts
      11. Section 113: Termination of a Service contract
      12. Section 114: Emoluments from a Service contract
      13. Section 115: Expiry of Mandates
      14. Section 116: Expiry of Management Contracts
      15. Section 117: Expiry of Proxies
      16. Section 118: Liquidation of Companies
      17. Section 119: Invalidity of Agreements Derogating from the Foregoing Provisions
      18. Section 120: Termination of Plant Agreements
      19. Section 121: Plant Modifications and Conciliatory Proceeding
      20. Section 122: Judicial Approval of a Plant Modification
      21. Section 123: Scope of the Social Plan
      22. Section 124: Social Plan Established prior to the Opening of Insolvency Proceedings
      23. Section 125: Reconciliation of Interests and Dismissals Protection
      24. Section 126: Judicial Orders Deciding on Dismissal Protection
      25. Section 127: Action brought by the Employee
      26. Section 128: Sale of Plant
    3. Chapter Three: Contest of the Debtor’s Transactions in Insolvency Proceedings
      1. Section 129: Policy
      2. Section 130: Congruent Coverage
      3. Section 131: Incongruent Coverage
      4. Section 132: Transactions Immediately Disadvantaging the Creditors of the Insolvency Proceedings
      5. Section 133: Wilful Disadvantage
      6. Section 134: Gratuitous Benefit
      7. Section 135: Loans Replacing Equity Capital
      8. Section 136: Silent Partnership
      9. Section 137: Payments on Bills of Exchange and Cheques
      10. Section 138: Persons with a Close Relationship to the Debtor
      11. Section 139: Calculation of Time Periods prior to the Request to Open Insolvency Proceedings
      12. Section 140: Date of Performance of Transaction
      13. Section 141: Executable Deed
      14. Section 142: Cash Transactions
      15. Section 143: Legal Consequences
      16. Section 144: Claims of the Party to the Contested Transaction
      17. Section 145: Transactions Contested and Enforced against Legal Successors
      18. Section 146: Limitation of the Right to Contest
      19. Section 147: Transactions carried out subsequent to the Opening of Insolvency Proceedings
  4. Part Four: Management and Disposition of the Assets Involved in the Insolvency Proceedings
    1. Chapter One: Arrestment of the Assets Involved in the Insolvency Proceedings
      1. Section 148: Transfer of the Assets Involved in the Insolvency Proceedings
      2. Section 149: Objects of Value
      3. Section 150: Sealing
      4. Section 151: Record of the Assets Involved in the Insolvency Proceedings
      5. Section 152: Record of Creditors
      6. Section 153: Survey of Property
      7. Section 154: Deposit with the Registry of the Insolvency Court
      8. Section 155: Accounting under Commercial and Fiscal Laws
    2. Chapter Two: Decision on Disposition
      1. Section 156: Report Meeting
      2. Section 157: Decision on the Further Proceedings
      3. Section 158: Measures taken prior to the Decision
      4. Section 159: Disposition of the Assets Involved in the Insolvency Proceedings
      5. Section 160: Transactions of Particular Importance
      6. Section 161: Provisional Prohibition of the Transaction
      7. Section 162: Sale of Plant to Persons with Specific Interests
      8. Section 163: Sale of Plant below Value
      9. Section 164: Legal Validity of the Transaction
    3. Chapter Three: Objects Subject to a Right to Separate Satisfaction
      1. Section 165: Disposition of Immovables
      2. Section 166: Disposition of Movables
      3. Section 167: Notification of the Creditor
      4. Section 168: Notification of Envisaged Sale
      5. Section 169: Protection of the Creditor Against Delayed Disposition
      6. Section 170: Distribution of Proceeds
      7. Section 171: Calculation of the Contribution to Costs
      8. Section 172: Other Use of Movables
      9. Section 173: Disposition by the Creditor
  5. Part Five: Satisfaction of the Creditors of the Insolvency Proceedings. Discontinuation of the proceedings
    1. Chapter One: Determination of Claims
      1. Section 174: Filing of Claims
      2. Section 175: Schedule
      3. Section 176: Proceedings of the Verification Meeting
      4. Section 177: Subsequent Filings
      5. Section 178: Prerequisites and Effects of Determination of Claims
      6. Section 179: Denied Claims
      7. Section 180: Competence for the Determination of Claims
      8. Section 181: Scope of Determination
      9. Section 182: Value of Action
      10. Section 183: Effect of the Decision
      11. Section 184: Action to Enforce a Claim Denied by the Debtor
      12. Section 185: Special Jurisdiction
      13. Section 186: Restitutio in Integrum
    2. Chapter Two: Distribution
      1. Section 187: Satisfaction of the Creditors of the Insolvency Proceedings
      2. Section 188: Distribution Record
      3. Section 189: Consideration of Denied Claims
      4. Section 190: Consideration of Creditors with a Right to Separate Satisfaction
      5. Section 191: Consideration of Conditional Claims
      6. Section 192: Subsequent Consideration
      7. Section 193: Amendments to the Distribution Record
      8. Section 194: Objections to the Distribution Record
      9. Section 195: Determination of a Fraction
      10. Section 196: Final Distribution
      11. Section 197: Final Meeting
      12. Section 198: Deposit of Retained Funds
      13. Section 199: Surplus Resulting from Final Distribution
      14. Section 200: Termination of the Insolvency Proceedings
      15. Section 201: Rights of the Creditors of the Insolvency Proceedings subsequent to Termination
      16. Section 202: Jurisdiction for Actions to Enable Execution
      17. Section 203: Judicial Order to Hold Delayed Distribution
      18. Section 204: Appeal
      19. Section 205: Implementation of a Delayed Distribution
      20. Section 206: Exclusion of the Creditors of the Assets Involved in the Insolvency Proceedings
    3. Chapter Three: Discontinuation of Insolvency Proceedings
      1. Section 207: Discontinuation for Lacking Assets Involved in the Insolvency Proceedings
      2. Section 208: Notification of Lacking Assets Involved in the Insolvency Proceedings
      3. Section 209: Satisfaction of the Creditors of the Assets Involved in the Insolvency Proceedings
      4. Section 210: Prohibition of Execution
      5. Section 211: Discontinuation upon Notification of Lacking Assets Involved in the Insolvency Proceedings
      6. Section 212: Discontinuation for Subsequent Lack of Grounds to Open Insolvency Proceedings
      7. Section 213: Discontinuation with the Creditor’s Consent
      8. Section 214: Discontinuation Procedure
      9. Section 215: Publication and Legal Effects of Discontinuation
      10. Section 216: Appeal
  6. Part Six: Insolvency Plan
    1. Chapter One: Establishment of the Plan
      1. Section 217: Policy
      2. Section 218: Submission of the Insolvency Plan
      3. Section 219: Breakdown of the Plan
      4. Section 220: Declaratory Part
      5. Section 221: Constructive Part
      6. Section 222: Formation of Groups
      7. Section 223: Rights of Creditors Entitled to Separate Satisfaction
      8. Section 224: Rights of the Creditors of the Insolvency Proceedings
      9. Section 225: Rights of Lower-ranking Creditors of the Insolvency Proceedings
      10. Section 226: Equal Treatment of Parties Involved
      11. Section 227: Debtor’s Liability
      12. Section 228: Modification of Conditions under Property Law
      13. Section 229: Survey of Assets. Earnings and Finance Plan
      14. Section 230: Further Attachments
      15. Section 231: Refusal of the Plan
      16. Section 232: Comments on the Plan
      17. Section 233: Suspension of Disposition and Distribution
      18. Section 234: Laying Out of Plan
    2. Chapter Two: Acceptance and Confirmation of the Plan
      1. Section 235: Discussion and Voting Meeting
      2. Section 236: Coincidence with the Verification Meeting
      3. Section 237: Voting Right of the Creditors of the Insolvency Proceedings
      4. Section 238: Voting Right of Creditors Entitled to Separate Satisfaction
      5. Section 239: Voting List
      6. Section 240: Modification of the Plan
      7. Section 241: Separate Voting Meeting
      8. Section 242: Voting in Writing
      9. Section 243: Voting by Groups
      10. Section 244: Necessary Majorities
      11. Section 245: Prohibition to Obstruct
      12. Section 246: Consent of Lower-ranking Creditors of the Insolvency proceedings
      13. Section 247: Debtor’s Consent
      14. Section 248: Confirmation by the Court
      15. Section 249: Conditioned Plan
      16. Section 250: Contravention of procedural Provisions
      17. Section 251: Protection of Minorities
      18. Section 252: Publication of Decision
      19. Section 253: Appeal
    3. Chapter Three: Effects of the Confirmed Plan. Surveillance of Implementation of the Plan
      1. Section 254: General Effects of the Plan
      2. Section 255: Proviso of Revival
      3. Section 256: Denied Claims. Remaining Claims
      4. Section 257: Execution under the Plan
      5. Section 258: Termination of the Insolvency proceedings
      6. Section 259: Effects of Termination
      7. Section 260: Surveillance of Implementation of the Plan
      8. Section 261: Tasks and Rights of the Insolvency Administrator
      9. Section 262: Obligation to Disclosure incumbent on the Insolvency Administrator
      10. Section 263: Transaction requiring Consent
      11. Section 264: Loan Ceiling
      12. Section 265: Lower-ranking Status of New Creditors
      13. Section 266: Consideration of Lower-ranking Status
      14. Section 267: Publication of Surveillance
      15. Section 268: Termination of Surveillance
      16. Section 269: Costs of Surveillance
  7. Part Seven: Personal Management
    1. Section 270: Prerequisites
    2. Section 271: Subsequent Order
    3. Section 272: Repeal of the Order
    4. Section 273: Publication
    5. Section 274: Legal Status of the Custodian
    6. Section 275: Consent of the Custodian
    7. Section 276: Consent of the Creditors’ Committee
    8. Section 277: Ordering the Requirement of Consent
    9. Section 278: Funds for the Debtor’s Livelihood
    10. Section 279: Mutual Contracts
    11. Section 280: Liability. Contest of the Debtor’s Transactions in Insolvency Proceedings
    12. Section 281: Notification of Creditors
    13. Section 282: Disposition of Securities
    14. Section 283: Satisfaction of the Creditors of the Insolvency Proceedings
    15. Section 284: Insolvency Plan
    16. Section 285: Lacking Assets Involved in the Insolvency Proceedings
  8. Part Eight: Discharge of Residual Debt
    1. Section 286: Policy
    2. Section 287: Debtor’s Request
    3. Section 288: Right of Proposal
    4. Section 289: Decision by the Insolvency Court
    5. Section 290: Refusal of Discharge of Residual Debt
    6. Section 291: Notification of Discharge of Residual Debt
    7. Section 292: Legal Status of Trustee
    8. Section 293: Trustee’s Remuneration
    9. Section 294: Equal Treatment of Creditors
    10. Section 295: Obligations of the Debtor
    11. Section 296: Contravention of Obligations
    12. Section 297: Insolvency Offences
    13. Section 298: Coverage of the Trustee’s Minimum Remuneration
    14. Section 299: Expiry before Date
    15. Section 300: Decision on Discharge of Residual Debt
    16. Section 301: Effect of Discharge of Residual Debt
    17. Section 302: Excepted Claims
    18. Section 303: Retraction of Discharge of Residual Debt
  9. Part Nine: Consumer Insolvency Proceedings and other Minor Proceedings
    1. Chapter One: Scope of Application
      1. Section 304: Principle
    2. Chapter Two: Plan for the Settlement of Debts
      1. Section 305: Debtor’s Request to open Insolvency Proceedings
      2. Section 305: a Failure of Out-of-Court Debt Settlement
      3. Section 306: Suspension of Proceedings
      4. Section 307: Service on the Creditors
      5. Section 308: Acceptance of the Plan for the Settlement of Debts
      6. Section 309: Replacement of Approval
      7. Section 310: Costs
    3. Chapter Three: Simplified Insolvency Proceedings
      1. Section 311: Initiation of the Proceedings concerning Opening of Insolvency Proceedings
      2. Section 312: General Procedural Simplifications
      3. Section 313: Trustees
      4. Section 314: Simplified Distribution
  10. Part Ten: Special Types of Insolvency Proceeding
    1. Chapter One: Insolvency Proceeding of a Decedent’s Estate
      1. Section 315: Local Jurisdiction
      2. Section 316: Admissibility of the Opening of Insolvency Proceedings
      3. Section 317: Persons Entitled to Request the Opening of Insolvency Proceedings
      4. Section 318: Entitlement to Make the Request for the Joint Marital Property
      5. Section 319: Request Deadline
      6. Section 320: Reasons for Opening
      7. Section 321: Execution following Succession
      8. Section 322: Contestable Transactions on the Part of’ the Heir
      9. Section 323: The Heir’s Expenses
      10. Section 324: Debts incumbent on the Assets Involved in the Insolvency Proceedings
      11. Section 325: Obligations incumbent on the Estate
      12. Section 326: The Heirs’ Claims
      13. Section 327: Lower-ranking Obligations
      14. Section 328: Restituted Objects
      15. Section 329: Revisionary Succession
      16. Section 330: Purchase of a Decedent’s Estate
      17. Section 331: Simultaneous Insolvency of the Heir
    2. Chapter Two: Insolvency Proceedings relating to the Joint Marital Property with Continued Community
      1. Section 332: Transfer to Insolvency Proceedings opened for an Estate
    3. Chapter Three: Insolvency Proceedings relating to the Jointly Administered Joint Marital Property of a Community
      1. Section 333: Right to file a Request. Grounds for Opening Proceedings
      2. Section 334: Personal Liability of the Spouses
  11. Part Eleven: Entering into Force
    1. Section 335: Referral to Introductory Act

Insolvency Statute (Insolvenzordnung, InsO)

Part One: General Provisions

Section 1: Objectives of the Insolvency Proceedings

The insolvency proceedings shall serve the purpose of collective satisfaction of a debtor’s creditors by liquidation of the debtor’s assets and by distribution of the proceeds, or by reaching an arrangement in an insolvency plan, particularly in order to maintain the enterprise. Honest debtors shall be given the opportunity to achieve discharge of residual debt.

Section 2: Jurisdiction of the Local Court as Insolvency Court

(1) The Local Court in whose district a Regional Court is located shall have exclusive jurisdiction for insolvency proceedings as the insolvency court for the district of such Regional Court.

(2) The governments of the Länder shall be empowered to designate other or additional Local Courts as insolvency courts by means of a legal ordinance for the purposes of expedient furtherance or expedited conduct of proceedings, and to determine different districts of insolvency courts. The governments of the Länder may delegate such power to the judicial administrations of the Länder.

Section 3: Local Jurisdiction

(1) The insolvency court in whose district the debtor has his usual venue shall have exclusive local jurisdiction. If the centre of the debtor’s self-employed business activity is located elsewhere, the insolvency court in whose district such place is located shall have exclusive jurisdiction.

(2) If several courts have jurisdiction, the court first requested to open the insolvency proceedings shall exclude any other jurisdiction.

Section 4: Applicability of the Code of Civil Procedure (Zivilprozessordnung)

Unless this statute provides otherwise the provisions contained in the Code of Civil Procedure shall apply to the insolvency proceedings mutatis mutandis.

Section 4a: Deferment of the Costs of the Insolvency Proceedings

(1) If the debtor is an individual and if he has made a request for discharge of residual debt, the cost of the insolvency proceedings shall be deferred on request until such time as discharge of residual debt is awarded, insofar as his assets are likely not to be sufficient to cover these costs. Deferment in accordance with the first sentence shall also cover the costs of the proceedings regarding the plan for the settlement of debts and the proceedings for discharge of residual debt. The debtor shall enclose with the request a declaration as to whether one of the grounds for refusal contained in section 290 subs. 1 Nos. 1 and 3 pertains. Deferment shall be ruled out if such a reason pertains.

(2) If the cost of the proceedings are deferred to the debtor, on request a lawyer of his choice shall be appointed who is willing to represent him if representation by counsel appears to be necessary in spite of the duty of assistance incumbent on the court.

Section 121 subs. 3 to 5 of the Code of Civil Procedure shall apply mutatis mutandis.

(3) The effect of deferment shall be as follows:

1. the Federal or Land cash office may claim

a) court costs in arrears and those arising,

b) the claims of the appointed lawyer which transfer to the cash office against the debtor only in accordance with the provisions made by the court;

2. the appointed lawyer is unable to assert claims for fees against the debtor. Deferment shall be effected separately in respect of each stage of the proceedings. Until such time as a decision is made regarding deferment, the effects specified in the first sentence shall apply on an interim basis. Section 4b subs. 2 shall apply mutatis mutandis.

Section 4b: Repayment and Adjustment of the Deferred Amounts

(1) If the debtor is unable once discharge of residual debt has been awarded to pay the deferred amount from his income and his assets, the court may extend deferment and set the monthly instalments to be paid. Section 115 subs. 1 and 2, as well as section 120 subs. 2, of the Code of Civil Procedure shall apply mutatis mutandis.

(2) The court may alter the ruling regarding the deferment and the monthly instalments at any time insofar as any personal or economic circumstances relevant to the deferment have undergone major changes. The debtor shall be obliged to report to the court a major change in these circumstances without delay. Section 120 subs. 4 first and second sentences of the Code of Civil Procedure shall apply mutatis mutandis. A change placing the debtor at a disadvantage shall be ruled out if four years have passed since termination of the proceedings.

Section 4c: Rescission of Deferment

The court may rescind deferment if

1. the debtor intentionally or with gross negligence has provided incorrect information regarding circumstances relevant to the opening of the insolvency proceedings or to the deferment, or has not submitted a declaration required by the court regarding his circumstances;

2. the personal or economic preconditions for deferment did not apply; in such a case, rescission shall be ruled out if four years have passed since termination of the proceedings;

3. the debtor is more than three months in arrears in respect of payment of a monthly instalment or of the payment of another amount and such arrears are his fault;

4. the debtor is not in suitable gainful employment and, if he is unemployed, is not looking for employment or rejects acceptable employment; section 296 subs. 2 second and third sentences shall apply mutatis mutandis;

5. discharge of residual debt is refused or revoked.

Section 4d: Legal recourse

(1) Immediate complaint shall be available to the debtor against refusal to defer or rescission of deferment, as well as against refusal to appoint a lawyer.

(2) If deferment is approved, the state cash office shall be entitled to file an immediate complaint. The latter may only be based on the fact that deferment should have been rejected given the personal or economic circumstances of the debtor.

Section 5: Principles of the Insolvency Proceedings

(1) The insolvency court shall investigate ex officio all circumstances relevant to insolvency proceedings. In particular, the court may hear witnesses and experts for this purpose.

(2) The court may take decisions without an oral hearing. If an oral hearing takes place, section 227 subs. 3 first sentence of the Code of Civil Procedure shall not apply.

(3) Tables and records may be prepared and processed using computer equipment.

Section 6: Immediate Appeal

(1) Decisions of the insolvency court may be only appealed if this statute provides for an immediate appeal.

(2) The period within which an immediate appeal has to be brought shall begin on the day when the court promulgates its decision or when a decision is served on the parties if not promulgated.

(3) The decision regarding the appeal shall only be effective when it becomes final. However, the court hearing the appeal may order immediate effectiveness of the decision.

Section 7: Appeal on Points of Law

An appeal on points of law may lie against the decision on the immediate appeal.

Section 8: Service

(1) Documents shall be served ex officio. They may be served by mail. The documents to be served shall not require certification.

(2) Service shall not be made to persons with unknown residence. If such persons have a representative empowered to receive any documents to be served, the documents shall be served on such representative.

(3) The insolvency court may instruct the insolvency administrator to serve the documents.

Section 9: Publication

(1) Publication shall by made by notification in the gazette or in an electronic information and communication system intended for the court; such publication maybe restricted to excerpts. Documents to be published shall mention the debtor’s particulars with special reference to his address and his branch of business. Such publication shall be deemed to have been effected when two additional days following the day of publication have expired.

(2) The insolvency court may occasion additional and repeated publications. The Federal Ministry of Justice shall be empowered to govern the details of publication in an electronic information and communication system by means of an ordinance which shall require the approval of the Bundesrat. In doing so, in particular deletion periods shall be provided for, as shall regulations ensuring that the publications

1. remain intact, complete and up-to-date,

2. can be traced to their source at any time,

3. cannot be copied by third parties in accordance with the state-of-the-art of existing technology.

(3) Publication shall suffice as evidence of service on all parties to the proceedings even if any provision additionally orders individual service.

Section 10: Hearing of the Debtor

(1) If any provision requires a hearing of the debtor such hearing may be waived if the debtor is resident in a foreign country and such hearing would unreasonably delay the proceedings, or if the debtor’s residence is unknown. In such a case a representative or relation of the debtor should be heard.

(2) If the debtor is not an individual subs. 1 shall apply mutatis mutandis to the hearing of persons entitled to represent the debtor or holding his shares.

Part Two: Opening of the Insolvency Proceedings. Involved Assets and Parties.

Chapter One: Prerequisites of Opening and Opening Proceedings

Section 11: Admissibility of Insolvency Proceedings

(1) Insolvency proceedings may be opened for the assets owned by any individual or corporation. An unincorporated association in this respect shall be deemed equivalent to a corporation.

(2) Insolvency proceedings may also be opened for:

1. the assets owned by a company without legal personality (general commercial company, limited partnership, professional partnership, company under the Civil Code, shipping company, EEIG);

2. under sections 315 to 334, the estate of a deceased person, the joint marital property of a continued community or the marital property of a community jointly administered by both spouses.

(3) After liquidation of a corporation or a company without legal personality, insolvency proceedings may be opened as long as the assets have not been distributed.

Section 12: Corporations under Public Law

(1) Insolvency proceedings may not be opened for the assets owned by

1. the Federation or a Land;

2. a corporation under public law supervised by a Land if the law of the Land exempts such corporation from insolvency proceedings.

(2) If the law of a Land exempts the assets owned by a corporation from insolvency proceedings under subs. 1 No. 2, the employees of such corporation in case of its illiquidity or overindebtedness may apply to the Land for benefits due to them in case of insolvency proceedings opened under the provisions of the Third Book of the Social Code (Drittes Buch Sozialgesetzbuch) governing insolvency substitute benefits from the Employment Office and under the provisions of the Act to Improve Occupational Pensions (Gesetz zur Verbesserung der betrieblichen Altersversorgung) from the institution ensuring insolvency insurance.

Section 13: Request to Open Insolvency Proceedings

(1) Insolvency proceedings shall be opened on request only. Such request may be filed by the creditors and by the debtor.

(2) Such request may be withdrawn until the insolvency court opens the insolvency proceedings or the request has been refused with final effect.

Section 14: Request by the Creditor

(1) A creditor’s request shall be admissible if he has a legal interest in the opening of the insolvency proceedings and shows his claim, and the reason why insolvency proceedings should be opened, to the satisfaction of the court.

(2) If a request is admissible the insolvency court shall hear the debtor.

Section 15: Entitlement to Request the Opening of Insolvency Proceedings for the Assets Owned by Corporations and for those Owned by Companies without Legal Personality

(1) As well as the creditors, any member of the board of directors of a corporation or, in the case of a company without legal personality or of a partnership limited by shares, any general partner, and any liquidator shall be entitled to request the opening of insolvency proceedings for the assets owned by such corporation or company without legal personality.

(2) If such request is not filed by all members of the board of directors, all general partners or all liquidators, it shall be admissible if the reason why insolvency proceedings should be opened is shown to the satisfaction of the court. The insolvency court shall hear the other members of the board of directors, general partners or liquidators.

(3) If in the case of a company without legal personality none of the general partners is an individual, subs. 1 and 2 shall apply mutatis mutandis to the members of the board of directors, to the general partners and to the liquidators of the partners empowered to represent the company. The same shall apply if the grouping of companies continues in this way.

Section 16: Reason to Open Insolvency Proceedings

The opening of insolvency proceedings shall require the existence of a reason to open such proceedings.

Section 17: Illiquidity

(1) Illiquidity shall be the general reason to open insolvency proceedings.

(2) The debtor shall be deemed illiquid if he is unable to meet his mature obligations to pay. Illiquidity shall be presumed as a rule if the debtor has stopped payments.

Section 18: Imminent Illiquidity

(1) If the debtor requests the opening of insolvency proceedings imminent illiquidity shall also be a reason to open.

(2) The debtor shall be deemed to be faced with imminent illiquidity if he is likely to be unable to meet his existing obligations to pay on the date of their maturity.

(3) If in the case of a corporation, or of a company without legal personality, the request is not filed by all members of the board of directors, all general partners or all liquidators, subs. 1 shall only apply if the person or persons filing the request are empowered to represent the company or the partnership.

Section 19: Overindebtedness

(1) Overindebtedness shall be also a reason to open insolvency proceedings for a corporation.

(2) Overindebtedness shall exist if the assets owned by the debtor no longer cover his existing obligations to pay. In the assessment of the debtor’s assets, however, the continuation of the enterprise shall be taken as a basis if according to the circumstances such continuation is deemed highly likely.

(3) If none of the general partners of a company without legal personality is an individual, subs. 1 and 2 shall apply mutatis mutandis. This shall not apply if the general partners include another company with an individual as general partner.

Section 20: Obligation of Disclosure during the Opening Proceeding, Reference to Discharge of Residual Debt

(1) If the request to open insolvency proceedings is admissible the debtor shall disclose to the insolvency court such information as is necessary for a decision on the request. Sections 97, 98 and 101 subs. 1 first and second sentences, and subs. 2, shall apply mutatis mutandis.

(2) If the debtor is an individual, he shall be informed that he may obtain discharge of residual debt in accordance with sections 286 to 303.

Section 21: Decisions Ordering Arrestment

(1) The insolvency court shall take all measures appearing necessary in order to avoid any detriment to the financial status of the debtor for the creditors until the insolvency court decides on the request. The debtor shall be entitled to file an immediate complaint against the ordering of the measure.

(2) In particular, the court may

1. designate a temporary insolvency administrator to whom sections 8 subs. 3, as well as sections 56 and 58 to 66 shall apply mutatis mutandis;

2. impose a general prohibition of transfers on the debtor or order that the debtor’s transfers of property shall require the consent of the temporary insolvency administrator in order to become effective;

3. order a restriction or temporary restriction on measures of execution against the debtor unless immovables are involved;

4. order a temporary interception of the debtor’s mail in respect of which sections 99 and 101 subs. 1 first sentence shall apply mutatis mutandis.

(3) If other measures prove to be insufficient the court may sub poena the debtor and have him detained after hearing him. If the debtor is not an individual the same shall apply to his directors or general partners. Section 98 subs. 3 shall apply mutatis mutandis to the ordering of detention.

Section 22: Legal Status of the Temporary Insolvency Administrator

(1) If the insolvency court designates a temporary insolvency administrator and imposes a general prohibition of transfers on the debtor the right to manage and transfer the debtor’s property shall be vested in the temporary insolvency administrator. In such cases the temporary insolvency administrator shall:

1. see to the arrestment and preservation of the debtor’s property;

2. continue an enterprise operated by the debtor until the insolvency court decides on the opening of the insolvency proceedings, unless the insolvency court consents to a close-down of such enterprise in order to avoid a considerable loss of the debtor’s property;

3. verify whether the debtor’s property will cover the costs of the insolvency proceedings; in addition, the insolvency court may charge him as an expert with verification of whether a reason to open insolvency proceedings exists, and which prospects exist for the continuation of the debtor’s enterprise.

(2) If the insolvency court designates a temporary insolvency administrator without imposing a general prohibition of transfers on the debtor the court shall determine the duties of such temporary insolvency administrator. Such duties may not exceed the duties under subs. 1 second sentence.

(3) The temporary insolvency administrator shall be entitled to enter the debtor’s business premises and to investigate there. The debtor shall grant the temporary insolvency administrator inspection of his books and business documents. The debtor must disclose to him any necessary information; sections 97, 98 and 101 subs. 1 first and second sentences and subs. 2 shall apply mutatis mutandis.

Section 23: Publication of Restriction on Property Transfers

(1) The decision ordering any of the restrictions on property transfers mentioned at section 21 subs. 2 No. 2 and designating a temporary insolvency administrator shall be published. It shall be individually served on the debtor, on any person with an obligation to the debtor, and on the temporary insolvency administrator. At the same time the debtor’s obligors shall be required to meet their obligations to the debtor exclusively in compliance with the order.

(2) If the debtor is registered in a Commercial Register, in a Register of Cooperatives, in a Register of Partnerships or in a Register of Associations the registry of the insolvency court shall send a copy of such order to the registering court.

(3) Sections 32 and 33 shall apply mutatis mutandis to the registration of restrictions on property transfers in the land register, the register of ships and the register of ships under construction, as well as in the register of liens on aircraft.

Section 24: Effects of Restrictions on Property Transfers

(1) Sections 81 and 82 shall apply mutatis mutandis to any contravention of the restrictions on property transfers mentioned at section 21 subs. 2 No. 2.

(2) If the right to transfer the debtor’s property has been vested in a temporary insolvency administrator, section 85 subs. 1 first sentence and section 86 shall apply mutatis mutandis to pending actions.

Section 25: Repeal of Measures of Arrestment

(1) If the measures of arrestment are repealed, section 23 shall apply mutatis mutandis to the publication of the repeal of a restriction on property transfer.

(2) If the right to transfer the debtor’s property has been vested in a temporary insolvency administrator he shall settle any costs incurred using the property administered by him and meet any obligation entered into by him before his designation is repealed. The same shall apply to obligations under continuing obligations if the temporary insolvency administrator has received the consideration under such contract for the property administered by him.

Section 26: Refusal for Lacking Assets

(1) The insolvency court shall refuse a request to open insolvency proceedings if the debtor’s assets will probably be insufficient to cover the costs of the proceedings. Such refusal shall be excluded if a sufficient amount of money is advanced, or the costs have been deferred in accordance with Section 4a.

(2) The court shall enter any debtor for whom a request to open insolvency proceedings has been refused for lacking assets into a record (record of debtors). The provisions governing the record of debtors under the Code of Civil Procedure shall apply mutatis mutandis; the entry shall however be cancelled after a period of five years.

(3) Anyone advancing an amount of money under subs. 1 second sentence may claim reimbursement of the advanced amount by any person who, in contravention of the provisions of company law, as well as in contravention of his duties and wrongfully, has not requested the opening of insolvency proceedings. Failing agreement as to whether such person has acted in contravention of his duties and wrongfully in refraining from such request, the burden of proof shall shift to him. The claim shall be subject to limitation after five years.

Section 27: Order Opening the Insolvency Proceedings

(1) If insolvency proceedings are opened the insolvency court shall designate an insolvency administrator. Sections 270 and 313 subs. 1 shall remain unaffected.

(2) The order opening the insolvency proceedings shall specify:

1. the business name or name and first names, branch of business or occupation, commercial establishment or place of abode of the debtor;

2. the name and address of the insolvency administrator;

3. the hour when the insolvency proceedings were opened.

(3) If the order does not specify the hour when the insolvency proceedings were opened the moment of opening shall be deemed the noon of the day when the order was issued.

Section 28: Requirements Incumbent on the Creditors and Debtors

(1) In the order opening the insolvency proceedings the creditors shall be required to file their claims in compliance with section 174 with the insolvency administrator within a definite period of time. Such period of time shall be fixed to extend over not less than two weeks and not more than three months.

(2) In the order opening the insolvency proceedings the creditors shall be required immediately to inform the insolvency administrator which security interests they claim to have in personal property or rights of the debtor. Details are to be provided of the object of the claimed security interest, the nature and causal origin of the security interest, as well as the secured claim. Any person who by fault omits to provide this information, or provides it late, shall be liable for the consequent damage.

(3) In the order opening the insolvency proceedings, those persons having obligations to the debtor shall be required no longer to fulfil these obligations to the debtor, but to the administrator.

Section 29: Docketing of Meetings

(1) In the order opening the insolvency proceedings the insolvency court shall docket meetings for:

1. a creditors’ assembly deciding on the continuation of the insolvency proceedings based on the insolvency administrator’s report (report meeting); such meeting shall be docketed within six weeks and must not be docketed more than three months later;

2. a creditors’ assembly verifying the filed claims (verification meeting); the period of time between expiry of the period to file claims and the verification meeting shall extend over not less than one week and not more than two months.

(2) The meetings may coincide.

Section 30: Publication of the Order Opening the Insolvency Proceedings

(1) The registry of the insolvency court shall publish the order opening the insolvency proceedings immediately. Notwithstanding Section 9 remaining unaffected, the notification is to be published in extract form in the Federal Bulletin.

(2) The order shall be served individually on the debtor’s creditors and obligors and on the debtor himself.

Section 31: Commercial Register, Register of Cooperatives, Register of Partnerships and Register of Associations

If the debtor is registered in a Commercial Register, in a Register of Cooperatives, in a Register of Partnerships or in a Register of Associations, the registry of the insolvency court shall send to the registering court:

1. a copy of the order opening the insolvency proceedings if insolvency proceedings have been opened;

2. a copy of the order refusing the opening of insolvency proceedings if the opening of insolvency proceedings has been refused for lacking assets, and if the debtor is a corporation or a company without legal personality liquidated by such refusing order.

Section 32: Land Register

(1) The opening of insolvency proceedings shall be entered in the Land Register:

1. for any parcel of real estate with the debtor registered as owner;

2. for the debtor’s registered rights to real estate or to registered rights if the type of such rights and the circumstances give rise to the suspicion that the creditors of the insolvency proceedings would be placed at a disadvantage without such entry.

(2) If the insolvency court is aware of such parcels of real estate or such rights it shall request entry by the Land Register ex officio. Such entry may also be requested from the Land Register Office by the insolvency administrator.

(3) If the administrator releases or sells a parcel of real estate or a right for which the opening of the insolvency proceedings has been registered, the insolvency court shall request the Land Register to delete such entry. Such deletion may also be requested from the Land Register Office by the administrator.

Section 33: Ship/Aircraft Register

Section 32 shall apply mutatis mutandis to the registration of the opening of insolvency proceedings in the register of ships and the register of ships under construction, as well as in the register of liens on aircraft. In such a case the parcels of real estate shall be replaced by the ships, ships under construction and aircraft entered in such registers, and the land register by the registering court, respectively.

Section 34: Appeal

(1) If the opening of the insolvency proceedings is refused the requesting party, and the debtor if the request was refused under section 26, may bring an immediate appeal.

(2) If the insolvency proceedings are opened the debtor may bring an immediate appeal.

(3) As soon as a decision repealing the order opening insolvency proceedings has become effective such termination of the insolvency proceedings shall be published. Section 200 subs. 2 second and third sentences shall apply mutatis mutandis. The legal effects of transactions executed by the insolvency administrator or by third parties with respect to him shall remain unaffected by such termination.

Chapter Two: Assets Involved in the Insolvency Proceedings. Classification of Creditors

Section 35: Definition of the Assets Involved in the Insolvency Proceedings

The insolvency proceedings shall involve all of the assets owned by the debtor on the date when the proceedings were opened and those acquired by him during the proceedings (assets involved in the insolvency proceedings).

Section 36: Objects not Subject to Attachment

(1) Objects not subject to execution shall not form part of the assets involved in the insolvency proceedings. Sections 850, 850a, 850c, 850e, 850f subs. 1 and sections 850g to 850i of the Code of Civil Procedure shall apply mutatis mutandis.

(2) However, the assets involved in the insolvency proceedings shall involve

1. the debtor’s business records; any legal obligation governing storage of such documents shall remain unaffected;

2. objects not subject to execution under section 811 subs. 1 Nos. 4 and 9 of the Code of Civil Procedure.

(3) Objects forming part of the debtor’s usual household and used in his household shall not form part of the assets involved in the insolvency proceedings if their disposition would obviously yield not more than proceeds largely disproportionate to their value.

(4) The insolvency court shall have jurisdiction in respect of rulings as to whether an object is subject to coercive execution in accordance with the provisions specified in subs. 1 second sentence. Instead of a creditor, the insolvency administrator shall be entitled to make a request. The first and second sentences shall apply mutatis mutandis in respect of the opening proceedings.

Section 37: Joint Marital Property of a Community

(1) If the joint marital property of a community is administered by one spouse only and insolvency proceedings are opened for the assets owned by such spouse, the assets involved in the insolvency proceedings shall involve the joint marital property. The joint marital property shall not be distributed among the spouses. Insolvency proceedings opened for the assets owned by the other spouse shall leave the joint marital property unaffected.

(2) If the joint marital property is administered by both spouses insolvency proceedings opened for the assets owned by any spouse shall leave the joint marital property unaffected.

(3) Subs. 1 shall apply to a continued community with the proviso that the spouse administering the joint marital property alone shall be replaced by the surviving spouse, and the late spouse by his descendants, respectively.

Section 38: Definition of the Creditors of the Insolvency proceedings

The assets involved in the insolvency proceedings shall serve to satisfy the liquidated claims held by the personal creditors against the debtor on the date when the insolvency proceedings were opened (creditors of the insolvency proceedings).

Section 39: Lower-ranking Creditors of the Insolvency proceedings

(1) The following claims shall be satisfied ranking below the other claims of creditors of the insolvency proceedings in the order given below, and according to the proportion of their amounts if ranking with equal status:

1. the interest accruing on the claims of the creditors of the insolvency proceedings from the opening of the insolvency proceedings;

2. the costs incurred by individual creditors of the insolvency proceedings due to their participation in the proceedings;

3. fines, administrative penalties, coercive penalty payments, as well as such incidental legal consequences of a criminal or administrative offence binding the debtor to pay money;

4. claims to the debtor’s gratuitous performance of a consideration;

5. claims to the refund of loans borrowed from a partner and replacing equity capital, or claims having the same rank as these.

(2) Claims which the creditor and the debtor agreed to be non-privileged in insolvency proceedings shall be satisfied after the claims mentioned at subs. 1 if the agreement does not provide otherwise.

(3) Interest accruing on the claims of non-privileged creditors of the insolvency proceedings, and the costs incurred by such creditors due to their participation in the proceedings shall rank with equal status as the claims of such creditors.

Section 40: Claims to Maintenance

Claims to maintenance under family law against the debtor may be filed in insolvency proceedings for the period after the opening of such proceedings only to the extent to which the debtor would be held liable as the heir of the obligated person. Section 100 shall remain unaffected.

Section 41: Immature Claims

(1) Immature claims shall be deemed to be mature.

(2) If such claims do not bear interest they shall be discounted at the statutory rate of interest. Thereby they shall be reduced to the amount corresponding to the full amount of such claim if the statutory rate of interest for the period from the opening of the insolvency proceedings to its maturity is added.

Section 42: Claims Subject to a Resolutory Condition

Claims subject to a resolutory condition shall be taken into account in the insolvency proceedings as claims not subject to a resolutory condition as long as such condition is not accomplished.

Section 43: Liability Incumbent on Several Persons

A creditor holding claims against several persons for the whole of one single payment may file the full amount in insolvency proceedings against any debtor until he is fully satisfied if he had a claim to such full amount on the date when the insolvency proceedings were opened.

Section 44: Rights of Obligors Liable Jointly and Severally and of Guarantors

Obligors liable jointly and severally and guarantors may file a claim to be acquired by them in the future against the debtor by satisfaction of the creditor only if the creditor does not file his claim.

Section 45: Conversion of Claims

Non-liquidated claims or contingent claims shall be filed at the value estimated for the date when the insolvency proceedings were opened. Claims expressed in foreign currency or in a mathematical unit shall be converted into German currency according to the exchange value applicable at the time of the opening of the proceedings at the place of payment.

Section 46: Recurring Payments

Claims to recurring payments with a definite amount and for a definite period shall be filed with the amount resulting from the addition of all open payments reduced by the discount mentioned at section 41. If the period of such payments is indefinite section 45 first sentence shall apply mutatis mutandis.

Section 47: Right to Separation

Anyone entitled to claim the separation of an object from the assets involved in the insolvency proceedings under a right in rem or in personam shall not form part of the creditors of the insolvency proceedings. Entitlement to separation of such object shall be governed by the legal provisions applying outside the insolvency proceedings.

Section 48: Right to Separation Extending to the Consideration received as a Substitute for the Object of Separation

If, prior to opening of the insolvency proceedings by the debtor, or subsequent to the opening, an object for which separation might have been claimed has been sold by the insolvency administrator without entitlement, anyone with a right to separation may claim assignment of the right to its consideration as long as such consideration has not been paid He may claim such consideration from the assets involved in the insolvency proceedings to the extent to which such consideration continues to exist in a distinct form among the assets involved in the insolvency proceedings.

Section 49: Separate Satisfaction from Immovables

Creditors with a right to satisfaction from objects subject to execution into immovables (immovable objects) shall be entitled to separate satisfaction under the provisions of the Act Governing Auctions and Sequestrations of Immovables (Gesetz über die Zwangsversteigerung und die Zwangsverwaltung).

Section 50: Separate Satisfaction of Pledgees

(1) Creditors holding a contractual pledge, a pledge acquired by attachment or a legal lien in an object forming part of the assets involved in the insolvency proceedings shall be entitled to separate satisfaction in respect of main claim, interest and costs from the pledged object under sections 166 to 173.

(2) The landlord’s or lessor’s legal lien may not be claimed in insolvency proceedings for rent or lease payments covering an earlier period than the last twelve months foregoing the opening of the insolvency proceedings, and for any damages to be paid due to the termination of such lease by the insolvency administrator. Liens held by lessors of agricultural land shall not be subject to such restriction with respect to the lease payment.

Section 51: Other Creditors with a Claim to Separate Satisfaction

The following creditors shall be deemed equal with those specified under section 50:

1. creditors to whom the debtor has assigned a movable item or a right in order to secure a claim;

2. creditors with a right to withhold an object in consideration of their improvement of the object as far as their claim from such improvement does not exceed the still existing improvement;

3. creditors with a right to withhold an object under the provisions of the Commercial Code;

4. the Federation, the Länder, the communes and commune associations with regard to objects subject to custom duties and tax under legal provisions to secure the payment of public dues.

Section 52: Elimination of Creditors with a Right to Separate Satisfaction

Creditors with a right to separate satisfaction shall be deemed creditors of the insolvency proceedings if they also have a personal claim against the debtor. However, they shall be entitled to proportionate satisfaction of their claim from the assets involved in the insolvency proceedings only to the extent that they waive their right to separate satisfaction, or that such separate satisfaction has failed.

Section 53: Creditors of the Assets Involved in the Insolvency Proceedings

The assets involved in the insolvency proceedings shall be used to settle in advance the costs of the insolvency proceedings and the other debts incumbent on the assets involved in the insolvency proceedings.

Section 54: Costs of the Insolvency Proceedings

The following shall be deemed costs of the insolvency proceedings:

1. the court fees in respect of the insolvency proceedings;

2. the remuneration earned and the expenses incurred by the temporary insolvency administrator, by the insolvency administrator and by the members of the creditors’ committee.

Section 55: Other Debts incumbent on the Assets Involved in the Insolvency Proceedings

(1) The following debts shall be deemed as further debts incumbent on the assets involved in the insolvency proceedings:

1. debts created by activities of the insolvency administrator or in another way by the administration, disposition and distribution of the assets involved in the insolvency proceedings without belonging to the costs of the insolvency proceedings;

2. obligations under mutual contracts claimed to be performed to the credit of the assets involved in the insolvency proceedings or to be settled after the opening of the insolvency proceedings;

3. obligations due to restitution for unjust enrichment of the assets involved in the insolvency proceedings.

(2) Obligations created by a temporary insolvency administrator in whom the right to transfer the debtor’s property was vested after the opening of the insolvency proceedings shall be deemed as debts incumbent on the assets involved in the insolvency proceedings. The same shall apply to obligations under a continuing obligation if the temporary insolvency administrator has received the consideration to the credit of the assets administered by him.

(3) If in accordance with subs. 2 reasoned wage claims in accordance with section 187 of the Third Book of the Social Code transfer to the Federal Employment Service, the Federal Service may only claim these as a creditor of the insolvency proceedings. The first sentence shall apply mutatis mutandis in respect of the claims specified in section 208 subs. 1 of the Third Book of the Social Code to the extent that these are upheld against the debtor.

Chapter Three: Insolvency Administrator Bodies Representing the Creditors

Section 56: Designation of the Insolvency Administrator

(1) The insolvency court shall designate an independent individual suited to the case at hand, particularly experienced in business affairs and independent of the creditors and of the debtor as insolvency administrator.

(2) The insolvency administrator shall receive a letter documenting his designation. Upon termination of his office he shall return such letter to the insolvency court.

Section 57: Election of a Different Insolvency Administrator

During the first meeting of creditors subsequent to the designation of the insolvency administrator the creditors may elect a different person to replace him. The different person shall be elected if in addition to the majority specified in section 76 subs. 2, the majority of the voting creditors has also voted for him. The court may refuse designation only of a person unqualified to assume such an office. Any creditor of the insolvency proceedings may bring an immediate appeal against a refusal of designation.

Section 58: Supervision by the Insolvency Court

(1) The insolvency administrator shall be subject to supervision by the insolvency court. The court may require him at any time to give specific information or to report on the progress of the proceedings and on the management.

(2) If the insolvency administrator does not fulfil his duties, subsequent to a warning the court may impose an administrative fine on him. An individual administrative fine may not exceed the sum of fifty thousand Deutsche Mark. The administrator may bring an immediate appeal against the decision.

(3) Subs. 2 shall apply mutatis mutandis to the implementation of the obligation to return assets in respect of an administrator who has been dismissed.

Section 59: Dismissal of the Insolvency Administrator

(1) The insolvency court may dismiss the insolvency administrator for an important reason. Such dismissal may be ordered ex officio or at the request of the administrator, of the creditors’ committee or of the creditors’ assembly. The court shall hear the administrator before taking its decision.

(2) The administrator may bring an immediate appeal against his dismissal. The administrator himself, the creditors’ committee or any creditor of the insolvency proceedings, if the creditors’ assembly requested the administrator’s dismissal, may bring an immediate appeal against an order refusing the dismissal of the administrator.

Section 60: Liability of the Insolvency Administrator

(1) The insolvency administrator shall be held liable to damages for all parties to the proceedings if he wrongfully violates the duties incumbent on him under this statute. He shall ensure the careful action of a proper and diligent insolvency administrator.

(2) If for the fulfilment of the duties incumbent on him as administrator he has to employ any not obviously unqualified wage-earners of the debtor within the scope of their former activities, pursuant to section 278 of the Civil Code, the administrator shall not be responsible for errors made by these persons, but shall be responsible for supervising them, as well as for decisions of particular importance.

Section 61: Nonperformance of Debts incumbent on the Assets Involved in the Insolvency Proceedings

If a debt incumbent on the assets involved in the insolvency proceedings created by a legal transaction of the insolvency administrator cannot be fully satisfied from the assets involved in the insolvency proceedings the administrator shall be held liable to damages for the creditor with a claim to the assets involved in the insolvency proceedings. This shall not apply if the administrator in creating such debt could not be aware of the probable insufficiency of the assets involved in the insolvency proceedings for performance.

Section 62: Period of Limitation

A claim to damages arising from a breach of duty on the part of the insolvency administrator shall be subject to limitation after three years beginning on the date when the injured party becomes aware of the damage and of the circumstances’ warranting the administrator’s liability to damages. Such claim shall be subject to limitation at the latest after three years beginning on the date of termination of the insolvency proceedings or when the order discontinuing such proceedings became final. The second sentence shall apply to violation of duties committed under delayed distribution (section 203) or under surveillance of implementation of the plan (section 260) with the proviso that termination of the insolvency proceedings shall be replaced by the execution of delayed distribution or the termination of surveillance, respectively.

Section 63: Remuneration of the Insolvency Administrator

(1) The insolvency administrator shall be entitled to remuneration in consideration of execution of his office, and to reimbursement of his adequate expenses. The ordinary rate of such remuneration shall be calculated based on the value of the assets involved in the insolvency proceedings when they are terminated. The scope and complexity of the administrator’s execution of his office shall be taken into account by derogating from the ordinary rate.

(2) If the costs of the proceedings have been deferred in accordance with section 4a, the insolvency administrator shall have a claim against the state cash office in respect of his payment and his expenses insofar as the insolvency assets are insufficient therefor.

Section 64: Determination by the Insolvency Court

(1) The insolvency court shall determine by means of an order the insolvency administrator’s remuneration and the expenses to be reimbursed to him.

(2) Such order shall be published and individually served on the administrator, the debtor and the members of the creditors committee if appointed. The determined amounts shall not be published; the public notification should point out that the complete order may be consulted in the registry.

(3) The administrator, the debtor and any creditor of the insolvency proceedings may bring an immediate appeal against the order. Section 567 subs. 2 of the Code of Civil Procedure shall apply accordingly.

Section 65: Empowerment to Issue an Order

The Federal Ministry of Justice shall be empowered to arrange the details of remunerations and refunding of the costs of the insolvency administrator by means of an ordinance.

Section 66: Rendering of Accounts

(1) Upon expiry of his office the insolvency administrator shall render account to an assembly of creditors.

(2) Prior to such assembly of creditors the insolvency court shall verify the administrator’s rendering of accounts. The court shall lay out the administrator’s final account with supporting documents, with a remark indicating verification of the account and with any comments of the creditors’ committee if appointed to the parties’ inspection; it may set a deadline for the creditors’ committee to make a statement. The period between the laying out of such documents and the date of the creditors’ assembly shall extend for at least one week.

(3) The creditors’ assembly may charge the administrator with intermediate accounts to be rendered on certain dates during the proceedings. Subs. 1 and 2 shall apply mutatis mutandis.

Section 67: Establishment of the Creditors’ Committee

(1) Prior to the first creditors’ assembly the insolvency court may establish a creditors’ committee.

(2) Such creditors’ committee shall represent the creditors with a right to separate satisfaction, the creditors of the insolvency proceedings holding the maximum claims and the small sum creditors. The committee shall include a representative of the debtor’s employees if the latter are involved as creditors of the insolvency proceedings holding considerable claims.

(3) Persons not holding the status of creditors may also be appointed as members of the creditors’ committee.

Section 68: Election of Different Members

(1) The creditors’ assembly shall decide on the establishment of a creditors’ committee. If the insolvency court has already established a creditors’ committee the creditors’ assembly shall decide whether it is to be maintained in office.

(2) It may vote the dismissal of members designated by the insolvency court or the appointment of additional members to the creditors’ committee.

Section 69: Duties Incumbent on the Creditors’ Committee

The members of the creditors’ committee shall support and monitor the insolvency administrator’s execution of his office. They shall demand information on the progress of business affairs, have the books and business documents inspected and the monetary transactions and the available cash verified.

Section 70: Dismissal

The insolvency court may dismiss a member of the creditors’ committee for an important reason. Such dismissal may be ordered ex officio or at the request of such member of the creditors’ committee or of the creditors’ assembly. The court shall hear such member of the creditors’ committee prior to issuing such order; he may bring an immediate appeal against the decision.

Section 71: Liability of the Members of the Creditors’ Committee

The members of the creditors’ committee shall be held liable to damages for the creditors with a right to separate satisfaction and for the creditors of the insolvency proceedings if they wrongfully violate the duties incumbent on them under this statute. Section 62 shall apply mutatis mutandis.

Section 72: Decisions of the Creditors’ Committee

A decision of the creditors’ committee shall be valid if the majority of members attended the meeting voting on such decision and backed such decision with the majority of voting members.

Section 73: Remuneration of the Members of the Creditors’ Committee

(1) The members of the creditors’ committee shall be entitled to remuneration in consideration of execution of their offices and to reimbursement of their adequate expenses. The time and scope of execution of their office on the part of the members shall be taken into account.

(2) Section 63 subs. 2, as well as sections 64 and 65 shall apply mutatis mutandis.

Section 74: Convening the Creditors’ Assembly

(1) The creditors’ assembly shall be convened by the insolvency court. All creditors with a right to separate satisfaction, all creditors of the insolvency proceedings, the insolvency administrator, the members of the Creditors’ Assembly and the debtor shall be entitled to attend such assembly.

(2) The time, place and agenda of the creditors’ assembly shall be published. Such publication may be waived if a creditors’ assembly adjourns its transactions.

Section 75: Request to Convene a Creditors’ Assembly

(1) A creditors’ assembly shall be convened if requested by

1. the insolvency administrator;

2. the creditors’ committee;

3. at least five creditors with a right to separate satisfaction or non-lower-ranking creditors of the insolvency proceedings whose rights to separate satisfaction and claims together are assessed by the insolvency court to represent one fifth of the sum resulting from the value of all rights to separate satisfaction and of the claims of all non-lower-ranking creditors of the insolvency proceedings.

4. one or more creditors with a right to separate satisfaction or non-lower-ranking creditors of the insolvency proceedings whose rights to separate satisfaction and claims together are assessed by the insolvency court to represent two fifths of the sum mentioned at No. 3.

(2) The period between reception of such request and the date of the creditors’ assembly shall extend no longer than three weeks.

(3) If the insolvency court refuses an order convening a creditors’ assembly the requesting party may bring an immediate appeal.

Section 76: Decisions of the Creditors’ Assembly

(1) The creditors’ assembly shall be presided by the insolvency court.

(2) A decision of the creditors’ assembly shall be valid if the sum of the claims held by backing creditors exceeds one half of the sum of claims held by the creditors with voting rights. For creditors with a right to separate satisfaction to whom the debtor is not personally liable, the claim shall be replaced by the value of such right.

Section 77: Determination of Voting Right

(1) A voting right shall be vested in claims filed by the creditor and not disputed by the insolvency administrator or by a creditor with a voting right. lower-ranking creditors shall have no voting rights.

(2) Creditors with disputed claims shall have a voting right to the extent to which the administrator and the attending creditors with a right to vote have agreed such vote during the creditors’ assembly. If the parties ‘cannot reach an agreement the decision of the insolvency court shall prevail. The insolvency court may modify its decision at the request of the administrator or of a creditor attending the creditors’ assembly.

(3) Subs. 2 shall apply mutatis mutandis to

1. creditors holding claims subject to a condition precedent;

2. creditors with a right to separate satisfaction.

Section 78: Repeal of a Decision taken by the Creditors’ Assembly

(1) If a decision taken by the creditors’ assembly is against the common interest of the creditors of the insolvency proceedings, the insolvency court shall repeal such decision at the request of a creditor with a right to separate satisfaction, of a non-lower-ranking creditor of the insolvency proceedings or of the insolvency administrator if such request is brought during the creditors’ assembly.

(2) Such repeal of a decision shall be published. Any creditor with a right to separate satisfaction and any non-lower-ranking creditor may bring an immediate appeal against a repeal. The requesting party may bring an immediate appeal against an order refusing such repeal.

Section 79: Information to the Creditors’ Assembly

The creditors’ assembly may require the insolvency administrator to give specific information and a report on the progress of the proceedings and on the management. If a creditors’ committee has not been appointed the creditors’ assembly may have the administrator’s monetary transactions and the available cash verified.

Part Three: Effects of the Opening of Insolvency Proceedings

Chapter One: General Effects

Section 80: Right to Manage and Transfer the Assets Involved in the Insolvency Proceedings Vested in the Insolvency Administrator

(1) Upon the opening of the insolvency proceedings the debtor’s right to manage and transfer the assets involved in the insolvency proceedings shall be vested in the insolvency administrator.

(2) An existing prohibition of transfers imposed on the debtor and purporting to protect only certain persons (section 135 and 136 of the Civil Code) shall have no binding effect on the proceedings. The provisions governing the effects of an attachment by way of execution shall remain unaffected.

Section 81: Transfers of Property by the Debtor

(1) If the debtor after the opening of the insolvency proceedings transfers an object forming part of the assets involved in the insolvency proceedings such transfer shall be legally invalid. Sections 892 and 893 of the Civil Code, 16 and 17 of the Act Governing Rights in Registered Ships and Ships under Construction (Gesetz über Rechte an eingetragenen Schiffen und Schiffsbauwerken) and 16 and 17 of the Act Governing Rights in Aircraft (Gesetz über Rechte an Luftfahrzeugen) shall remain unaffected. The consideration shall be restituted to the other party to the transfer from the assets involved in the insolvency proceedings if such assets received enrichment by it.

(2) With respect to an assignment of future claims to emoluments due to the debtor under a service contract or to recurring emoluments replacing them subs. 1 shall also apply to the extent to which such assignment covers any emoluments to be received by the debtor subsequent to termination of the insolvency proceedings. The debtor’s right to assign such emoluments to a trustee for the purpose of collective satisfaction of the creditors of the insolvency proceedings shall remain unaffected.

(3) If the debtor transferred an object forming part of the assets involved in the insolvency proceedings on the day when the insolvency proceedings were opened such transfer shall be presumed to have been effected after the opening of the insolvency proceedings.

Section 82: Performance in Favour of the Debtor

If the debtor received performance to settle an obligation after the opening of the insolvency proceedings although such obligation had to be performed to the credit of the assets involved in the insolvency proceedings the performing party shall be discharged of his obligation if he was unaware of the opening of the proceedings at the time of his performance. If such party performed his obligation prior to publication of the order opening the proceedings he shall be presumed to have been unaware of the opening of the proceedings.

Section 83: Decedent’s Estate. Continued Community

(1) If the debtor prior to the opening of the insolvency proceedings succeeded or during the insolvency proceedings succeeds to a decedent’s estate or to a legacy only the debtor shall be entitled to accept or disclaim such estate or legacy. The same shall apply to the disclaimer of a continued community.

(2) If the debtor is a limited heir the insolvency administrator may not transfer any object forming part of the decedent’s estate if such transfer would be invalid under section 2115 of the Civil Code with respect to the revisionary heir if the revisionary heir succeeds to the decedent’s estate.

Section 84: Liquidation of a Company or a Community

(1) If a community, another ownership in common or a company without legal personality exists between the debtor and third parties, any distribution or other liquidation shall be effected outside the insolvency proceedings. The third parties may claim separate satisfaction from the debtor’s share determined under such distribution or liquidation to settle any claims arising from the community, ownership in common or company without legal personality.

(2) An agreement excluding the right to liquidate a community for ever, for a limited period or for a period of notice to be given shall have no binding effect upon the insolvency proceedings. The same shall apply to a clause in the decedent’s will with a similar content and binding on the community of heirs, and to a similar agreement among the members of a community of heirs.

Section 85: Joinder of Pending Actions as Plaintiff

(1) Actions affecting the property forming part of the assets involved in the insolvency proceedings and pending for the debtor as plaintiff on the date when the insolvency proceedings are opened may be joined by the insolvency administrator with their existing status. If such joinder is delayed section 239 subs. 2 to 4 of the Code of Civil Procedure shall apply mutatis mutandis.

(2) If the administrator refuses such joinder the debtor and the defendant may continue the action.

Section 86: Joinder of Certain Pending Actions as Defendant

(1) Actions pending against the debtor as defendant on the date when the insolvency proceedings are opened may be joined by the insolvency administrator or continued by the plaintiff if they cover:

1. the separation of an object from the assets involved in the insolvency proceedings;

2. separate satisfaction, or;

3. a debt incumbent on the assets involved in the insolvency proceedings.

(2) If the administrator acknowledges such claim immediately the plaintiff may claim reimbursement of the costs incurred for such action only as a creditor of the insolvency proceedings.

Section 87: Claims held by the Creditors of the Insolvency Proceedings

The creditors of the insolvency proceedings shall only be permitted to enforce their claims under the provisions governing the insolvency proceedings.

Section 88: Execution prior to the Opening of Insolvency Proceedings

If a creditor of the insolvency proceedings during the last month preceding the request to open the insolvency proceedings or after such request acquired by virtue of execution a security attaching the debtor’s property forming part of the assets involved in the insolvency proceedings such security shall become legally invalid when the insolvency proceedings are opened.

Section 89: Prohibition of Execution

(1) Individual creditors of the insolvency proceedings may not execute into the assets involved in the insolvency proceedings or into the debtor’s other property during the insolvency proceedings.

(2) Even creditors without the status of creditors of the insolvency proceedings may not execute during the proceedings into future claims to emoluments due to the debtor under a service contract or into recurring emoluments replacing them. This shall not apply to execution under a claim for maintenance or under a claim arising from wilful tort into the amount of emoluments not subject to attachment by other creditors.

(3) The insolvency court shall decide on any relief to be granted against execution under subs. 1 or 2. Prior to its decision the court may issue a restraining order; in particular, it may order a temporary suspension of such execution with or without providing a security and its continuation subject to a security.

Section 90: Prohibition of Execution under Debts incumbent on the Assets Involved in the Insolvency Proceeding

(1) Execution in respect of debts incumbent on the assets involved in the insolvency proceedings not caused by a transaction of the administrator shall be inadmissible for a period of six months from the opening of the insolvency proceedings.

(2) The following liabilities shall not be considered as such debts incumbent on the assets involved in the insolvency proceedings:

1. obligations under a mutual contract for whose performance the administrator opted;

2. obligations under a continuing obligation for the period after the first date when the administrator might have terminated such contract;

3. obligations under a continuing obligation insofar as the administrator receives its consideration for the assets involved in the insolvency proceedings.

Section 91: Exclusion of other Acquisition of Rights

(1) After the opening of the insolvency proceedings rights in objects forming part of the assets involved in the insolvency proceedings cannot be acquired with legal effect even if such acquisition of rights is not based on the debtor’s transfer or effected by way of execution.

(2) Sections 878, 892 and 893 of the Civil Code, 3 subs. 3, 16 and 17 of the Act Governing Rights in Registered Ships and Ships Under Construction, 5 subs. 3, 16 and 17 of the Act Governing Rights in Aircraft and 20 subs. 3 of the Maritime Distribution Statute (Schiffahrtsrechtliche Verteilungsordnung) shall remain unaffected.

Section 92: General Damage

Rights held by the creditors of the insolvency proceedings for reimbursement of damage suffered jointly by such creditors due to a reduction of the property forming part of the assets involved in the insolvency proceedings before or after the opening of the insolvency proceedings (general damage) may be claimed only by the insolvency administrator during the insolvency proceedings. If such rights are sought against the administrator they may be claimed only by another, newly appointed insolvency administrator.

Section 93: Personal Liability of Partners

If insolvency proceedings have been opened for the assets owned by a company without legal personality or by a partnership limited by shares, only the insolvency administrator may claim a partner’s personal liability to the company’s debts during the insolvency proceedings.

Section 94: Preservation of the Right to Set Off a Claim

If by force of law or on the basis of an agreement a creditor of the insolvency proceedings had a right to set off a claim on the date when the insolvency proceedings were opened such right shall remain unaffected by the proceedings.

Section 95: Acquisition of the Right to Set Off a Claim During the Proceedings

(1) If on the date when the insolvency proceedings were opened one or more of the claims to be set off against each other were conditioned, were immature or did not cover similar types of performance such set-off may not be effected before its conditions are met. Sections 41 and 45 shall not apply. Set-off shall be excluded if the claim against which a set-off is to be effected will be unconditioned and mature before it may be set off.

(2) Set-off shall not be excluded by the claims being expressed in different currencies or mathematical units if these currencies or mathematical units are freely exchangeable at the place of payment of the claim against which a set-off is to be effected. They shall be converted according to the exchange value applicable to this place at the time of receipt of the declaration of set-off.

Section 96: Prohibition of Set-Off

(1) Set-off shall be prohibited if

1. a creditor of the insolvency proceedings has become an obligor to the credit of the assets involved in the insolvency proceedings only after the opening of the insolvency proceedings;

2. a creditor of the insolvency proceedings acquired his claim from another creditor only after the opening of the insolvency proceedings;

3. a creditor of the insolvency proceedings acquired the opportunity to set off his claim by a transaction subject to contest;

4. a creditor with a claim to be satisfied from the debtor’s free property is an obligor to the credit of the assets involved in the insolvency proceedings.

(2) Subs. 1 as well as section 95 subs. 1 third sentence shall not oppose the set-off of claims and benefits from transfer, payment or assignment agreements introduced into a system serving to implement such agreements where set-off is effected at the latest on the day of opening of the insolvency proceedings. A system within the meaning of the first sentence shall be a written agreement in accordance with Article 2 (a) of Directive 98/26/EC of the European Parliament and of the Council of 19 May 1998 on settlement finality in payment and securities settlement systems (OJ EC No. L 166 p. 45) reported to the Commission of the European Communities by the Deutsche Bundesbank or the competent authority of another member state or contracting party of the Agreement on the European Economic Area. Systems from third states shall be deemed equivalent to the systems named in the second sentence where they largely meet the preconditions stipulated in Article 2 (a) of Directive 98/26/EC.

Section 97: The Debtor’s Obligation to Disclosure and Cooperation

(1) The debtor shall disclose any circumstances relating to the insolvency proceedings to the insolvency court, the insolvency administrator, the creditors’ committee and, if so ordered by the insolvency court, to the creditors’ assembly. He shall also disclose any facts able to bring about his criminal prosecution for commission of a criminal or administrative offence. However, any fact disclosed by the debtor under his obligation in accordance with the first sentence may not be used against the debtor without his consent in trial or proceedings under the Administrative Offences Act (Gesetz über Ordnungswidrigkeiten) brought against the debtor or a relation mentioned at section 52 subs. 1 of the Code of Criminal Procedure.

(2) The debtor shall support the administrator in the latter’s execution of his duties.

(3) Under an order issued by the court the debtor shall be obligated to be available at any time to meet his obligations to disclosure and cooperation. He shall forbear any activity contradicting the execution of such duties.

Section 98: Imposition of the Duties of the Debtor

(1) If necessary to provide truthful statements the insolvency court shall order the debtor’s affidavit for the records that he disclosed any demanded facts truly, correctly and completely. Sections 478 to 480 and 483 of the Code of Civil Procedure shall apply mutatis mutandis.

(2) The court may sub poena the debtor and detain him after hearing him

1. if the debtor refuses to give information or to provide an assurance under oath or to support the fulfilment of the duties of the insolvency administrator,

2. if the debtor attempts to evade the execution of his obligations to disclosure and cooperation, in particular by preparing his flight, or

3. if such subpoena and detainment are necessary to avoid the debtor’s activities contradicting the execution of his obligations to disclosure and cooperation, in particular to secure the assets involved in the insolvency proceedings.

(3) Sections 904 to 910 and 913 of the Code of Civil Procedure shall apply mutatis mutandis in respect of the ordering of detention. The order imposing detention shall be rescinded ex officio as soon as the preconditions for the ordering of detention no longer exist. Immediate appeal shall be available against the ordering of detention, as well as against refusal of an application for rescission of the order imposing detention if its conditions no longer exist.

Section 99: Interception of the Debtor’s Mail

(1) If such measure seems necessary in order to investigate or prevent the debtor’s transactions disadvantaging the creditors the insolvency court at the insolvency administrator’s request or ex officio shall, by order and giving grounds, order redirection to the administrator of certain or all mail consignments destined for the debtor. Such order shall be issued after the debtor is heard unless this would endanger the purpose of the order due to the particular circumstances of the case. If the debtor is not previously heard, grounds for this must be given in the order and the hearing carried out immediately afterwards.

(2) The administrator shall be entitled to open any mail consignment redirected to him. Mail consignments with a content unrelated to the assets involved in the insolvency proceedings shall be forwarded to the debtor immediately. Any other mail consignments may be inspected by the debtor.

(3) The debtor may bring an immediate appeal against the ordering of interception of his mail. After hearing the administrator the insolvency court shall repeal such order if its conditions have ceased to exist.

Section 100: Maintenance Payments using the Assets Involved in the Insolvency Proceedings

(1) The creditors’ assembly shall determine whether and to what extent the debtor and his family are to be granted maintenance using the assets involved in the insolvency proceedings.

(2) Until the creditors’ assembly reaches a decision, with the agreement of the creditors’ committee if appointed, the insolvency administrator may grant necessary maintenance to the debtor. In the same way it shall be possible to grant maintenance to the debtor’s minor unmarried children, spouse, former spouse and the other parent of his child regarding a claim under sections 1615 1 and 1615 n of the Civil Code.

Section 101: Members of the Body Representing the Debtor. Employees

(1) If the debtor is not an individual, sections 97 to 99 shall apply mutatis mutandis to the members of the body representing or supervising the debtor, as well as to his general partners who are entitled to represent him. In addition; sections 97 subs. 1 and 98 shall apply mutatis mutandis to persons who left a position mentioned in the first sentence no earlier than two years before the opening of the insolvency proceedings was requested. Section 100 shall apply mutatis mutandis to the general partners of the debtor who are entitled to represent him.

(2) Section 97 subs. 1 first sentence shall apply mutatis mutandis to the debtor’s employees and previous employees, insofar as these did not leave earlier than two years prior to the opening of the insolvency proceedings was requested.

Section 102: Restriction of a Basic Right

Section 21 subs. 2 No. 4, as well as sections 99 and 101 subs. 1 first sentence shall authorize a limitation of the basic right of privacy (letters, telecommunications) (Article 10 of the Basic Law).

Chapter Two: Performance of Transactions. Cooperation of the Works Council

Section 103: Option to be Exercised by the Insolvency Administrator

(1) If a mutual contract was not (or not completely) performed by the debtor and its other party at the date when the insolvency proceedings were opened the insolvency administrator may perform such contract replacing the debtor and claim the other party’s consideration.

(2) If the administrator refuses to perform such contract the other party shall be entitled to its claims for non-performance only as a creditor of the insolvency proceedings. If the other party requires the administrator to opt for performance or non-performance the administrator shall state his intention to claim performance without negligent delay. If the administrator does not give his statement he may no longer insist on performance.

Section 104: Fixed-date Transactions Financial Futures

(1) If the delivery of goods with a market or stock exchange price was agreed to take place exactly on a definitely fixed date or within a definitely fixed period, and if such date or expiry of the period occurs after the insolvency proceedings were opened performance may not be claimed, but only claims for non-performance.

(2) If financial performance with a market or stock exchange price was agreed to take place at a fixed date or within a fixed period, and if such date or expiry of the period occurs after the insolvency proceedings were opened performance may not be claimed, but only claims for non-performance. In particular the following shall be regarded as financial performance

1. the delivery of precious metals,

2. the delivery of securities or comparable rights if it is not intended to obtain a participation in a company in order to establish a long-term association,

3. performances in specie which have to be effected in foreign currency or in a mathematical unit,

4. performances in specie the amount of which is indirectly or directly determined by the exchange rate of a foreign currency or mathematical unit, by the interest rate prevailing for claims or by the price of other goods or services,

5. options and other rights to deliveries or performances in specie in the meaning of Nos. 1 to 4.

If transactions on financial performances are combined in a framework contract for which agreement has been reached that in the case of violations of the contract it may only be terminated uniformly, the totality of these transactions shall be regarded as a mutual contract in the meaning of sections 103 and 104.

(3) Such claim for non-performance shall cover the balance between the agreed price and the market or stock exchange price prevailing at the place of performance on the second workday after the insolvency proceedings were opened for a contract with the agreed period of performance. The other party may bring such claim only as a creditor of the insolvency proceedings.

Section 105: Severable Contracts

If the contractual performances due to the parties are severable, and if the other party already had performed part of the services incumbent on it on the date when the insolvency proceedings were opened such other party shall be deemed a creditor of the insolvency proceedings for the amount of its claim to consideration corresponding to the part of the services already performed by it, even if the insolvency administrator claims performance of the services not yet performed. The other party shall not be entitled to claim restitution for non-performance of its claim to the consideration of the part of services transferred to the debtor’s assets before the insolvency proceedings were opened.

Section 106: Priority Notice

(1) If a priority notice was entered into the Land Register in order to secure a claim to grant or terminate a right in the debtor’s real estate or in a right registered for the debtor, or in order to secure a claim to modify the contents or priority of such right the creditor may claim satisfaction of his claim from the assets involved in the insolvency proceedings. The same shall apply if the debtor undertook additional obligations with respect to the creditor and ‘such obligations have not been met or have not been completely met.

(2) Subs. 1 shall apply mutatis mutandis to a priority notice entered into the register of ships and the register of ships under construction, or into the register of liens on aircraft.

Section 107: Retention of Title

(1) If the debtor, before the insolvency proceedings were opened, has sold a movable article while retaining title and transferring its possession to the purchaser the purchaser may claim performance of the sales contract. The same shall apply if the debtor has undertaken additional obligations with respect to the purchase and such obligations have not been met or have not been completely met.

(2) If the debtor, before the insolvency proceedings were opened, has purchased a movable article in which the has seller retained title and whose possession was transferred to the debtor by the seller, the insolvency administrator, required by the seller to opt for performance or non-performance, need not submit his declaration pursuant to section 103 subs. 2 until without negligent delay after the report meeting. This shall not apply if in the period preceding the report meeting a considerable reduction is to be expected in the value of the movable article and the creditor has notified the administrator of this circumstance.

Section 108: Continuity of Continuing Obligations

(1) Contracts concluded by the debtor for the lease and tenancy of immovables or premises and for services to be performed for the debtor shall continue to exist, but to the credit of the assets involved in the insolvency proceedings. This shall also apply in respect of rental and lease contracts concluded by the debtor as landlord or lessor relating to other effects assigned as a security to a third party who had financed their acquisition or production.

(2) Claims arising before the insolvency proceedings were opened may be brought by the other party only as a creditor of the insolvency proceedings.

Section 109: Debtor’s Status as Tenant or Lessee

(1) A contract for the tenancy or lease of immovables or premises concluded by the debtor as tenant or lessee may be terminated by the insolvency administrator with the legal period of notice irrespective of any agreed period of notice. If the dwelling of the debtor is the subject-matter of the lease agreement, termination shall be replaced by the right of the insolvency administrator to declare that claims becoming due on expiry of the period specified in the first sentence may not be asserted in the insolvency proceedings. If the administrator terminates under the first sentence, or if he submits the declaration in accordance with the second sentence, the other party may claim damages as a creditor of the insolvency proceedings for premature termination of such contract or in respect of the consequences of the declaration.

(2) If the debtor had not yet entered into possession of the immovables or premises when the insolvency proceedings were opened the administrator and the other party may withdraw from such contract. If the administrator withdraws from the contract the other party may claim damages as a creditor of the insolvency proceedings for premature termination of the contract. At the other party’s request each party shall state within two weeks whether it intends to withdraw from the contract; if any of the parties does not give their statement they shall lose the right to withdraw.

Section 110: Debtor’s Status as Landlord or Lessor

(1) If the debtor as landlord or lessor of immovables or premises assigned his future claim to tenancy or lease fees to a third party before the insolvency proceedings were opened the validity of such assignment shall be limited to tenancy or lease fees to be received for the current month of the opening of the insolvency proceedings. If the insolvency proceedings were opened after the fifteenth day of a month the validity of such assignment shall also be valid in respect of the following month.

(2) In particular, collection of the tenancy or lease fees shall be deemed an assignment for the purpose of subs. 1. An assignment under contract shall be deemed equivalent to a transfer effected by way of execution.

(3) The tenant or lessee may set off any claim entitling him against the debtor against the claim to tenancy or lease fees covering the period mentioned at subs. 1. Sections 95 and 96 Nos. 2 to 4 shall remain unaffected.

Section 111: Sale of Property Let by the Debtor

If the insolvency administrator sells immovables or premises let by the debtor, and if the purchaser replaces the debtor as a party of the tenancy or lease, the purchaser may terminate the tenancy or lease with the legal period of notice. Such notice may be given only for the first date of the legal period of notice. Section 57c of the Act on Forced Sale and Sequestration (Gesetz über die Zwangsversteigerung und die Zwangsverwaltung) shall apply mutatis mutandis.

Section 112: Prohibition to Terminate Tenancy or Lease Contracts

Tenancy or lease contracts concluded by the debtor as tenant or lessee may not be terminated by the other party after the opening of the insolvency proceedings was requested:

1. because of default in the payment of tenancy or lease fees arising before the opening of the insolvency proceedings was requested,

2. because of degradation of the debtor’s financial situation.

Section 113: Termination of a Service Contract

(1) A contract entitling the debtor to services may be terminated by the insolvency administrator and by the other party irrespective of any agreed duration of such contract or agreed exclusion of the right to routine termination. If no shorter period has been agreed, the period of notice shall be three months to month’s end. If the administrator terminates such contract the other party may claim damages as a creditor of the insolvency proceedings for premature termination of the service contract.

(2) If an employee intends to invoke the invalidity of the insolvency administrator’s termination of his contract he shall even bring an action with the Labour Court within three weeks of his reception of such termination if he invokes the invalidity of such termination for other reasons than those given at section 1 subs. 2 and 3 of the Dismissals Protection Act (Kündigungsschutzgesetz). Section 4 fourth sentence and section 5 of the Dismissals Protection Act shall apply mutatis mutandis.

Section 114: Emoluments from a Service Contract

(1) If the debtor prior to the opening of the insolvency proceedings assigned or pledged a future claim to emoluments due to him under a service contract or to recurring emoluments replacing them, the validity of such assignment or pledge shall be limited to the emoluments to be received by the debtor prior to the end of two years following the end of the current calendar month on the date of the opening of the proceedings.

(2) Against the claim to emoluments covering the period mentioned at subs. 1 the obligated person may set off any claim entitling; him against the debtor. Sections 95 and 96 Nos. 2 to 4 shall remain unaffected.

(3) If future emoluments were transferred prior to the opening of the insolvency proceedings by way of execution, the validity of such transfer shall be limited to emoluments to be received by the debtor for the current calendar month on the date of the opening of the proceedings. If the insolvency proceedings were opened after the fifteenth day of the month, the validity of such transfer shall extend to the subsequent calendar month. Section 88 shall remain unaffected; Section 89 subs. 2 second sentence shall apply mutatis mutandis.

Section 115: Expiry of Mandates

(1) Any mandate ordered by the debtor referring to the property forming part of the assets involved in the insolvency proceedings shall expire upon the opening of the insolvency proceedings.

(2) If suspension of such mandate would cause a risk the mandatory shall continue to perform the mandated transaction until the insolvency administrator is able to otherwise take care of such transaction himself. For this purpose the mandate shall be deemed to continue. The mandatory may claim reimbursement of his expenses incurred for such continuation as a creditor of the assets involved in the insolvency proceedings.

(3) As long as the mandatory is not at fault in being unaware of the opening of insolvency proceedings he shall benefit from the presumption that the mandate continues. The mandatory shall rank among the creditors of the insolvency proceedings with his reimbursement claims arising from such continuation.

Section 116: Expiry of Management Contracts

If anyone is obligated under a service or work contract with the debtor to manage a business transaction for the latter, section 115 shall apply mutatis mutandis. The provision governing reimbursement claims arising from a continuation of such management contract shall also apply to claims to remuneration.

Section 117: Expiry of Proxies

(1) A proxy granted by the debtor with respect to the property forming part of the assets involved in the insolvency proceedings shall expire upon the opening of the insolvency proceedings.

(2) As far as a mandate or a management contract is deemed to continue under section 115 subs. 2 the related authority shall also be deemed to continue.

(3) As long as the authorised person is not at fault in being unaware of the opening of insolvency proceedings he shall not be held liable under section 179 of the Civil Code.

Section 118: Liquidation of Companies

If a company without legal personality or a partnership limited by shares is liquidated by the opening of insolvency proceedings for the property owned by one partner the managing partner shall rank among the creditors of the assets involved in the insolvency proceedings with his claims arising from the provisional continuation of urgent business transactions. As long as the managing partner is not at fault in being unaware of the opening of insolvency proceedings he shall rank among the creditors of the insolvency proceedings with his claims arising from the continuation of business transactions. Section 84 subs. 1 shall remain unaffected.

Section 119: Invalidity of Agreements Derogating from the Foregoing Provisions

Agreements excluding or limiting the application of sections 103 to 118 in advance shall be invalid.

Section 120: Termination of Plant Agreements

(1) If a plant agreement provides for benefits incumbent on the assets involved in the insolvency proceedings the insolvency administrator shall consult the works council about agreement on a reduction of such benefits. Such plant agreement may be terminated by giving three months’ notice even if a longer period of notice has been agreed.

(2) The right to terminate a plant agreement for an important reason without a period of notice shall remain unaffected.

Section 121: Plant Modifications and Conciliatory Proceeding

In insolvency proceedings opened for the property owned by the entrepreneur, section 112 subs. 2 first sentence of the Industrial Constitution Act (Betriebsverfassungsgesetz) shall 1 apply with the proviso that the conciliatory proceedings shall only be preceded by an attempt on the part of the president of the Land Employment Office to settle the matter if both the insolvency administrator and the works council request such an attempt.

Section 122: Judicial Approval of a Plant Modification

(1) If a plant modification is envisaged, and if the insolvency administrator and the works council cannot reach an agreement pursuant to section 112 of the Industrial Constitution Act on reconciliation of interests within three weeks from the beginning of negotiations or written request to begin negotiations although the administrator has provided comprehensive information in good time to the works council, the administrator may request a decision on the part of the Labour Court approving such plant modification without prior proceedings under section 112 subs. 2 of the Industrial Constitution Act. Section 113 subs. 3 of the Industrial Constitution Act shall not be applied in this respect. The administrator’s right to bring about a reconciliation of interests pursuant to section 125 or to file a request for a court decision pursuant to section 126 shall remain unaffected.

(2) The Court shall approve such plant modification if the economic condition of the enterprise, also taking into account the social concerns of the employees, warrants the execution of such plant modification, without previous proceedings in accordance with section 112 subs. 2 of the Industrial Constitution Act. The provisions contained in the Labour Court Act (Arbeitsgerichtsgesetz) on decisions by order shall apply mutatis mutandis; the insolvency administrator and the works council shall be the parties involved in the proceedings. Pursuant to section 61 a subs. 3 to 6 of the Labour Court Act, the application is to be dealt with as a matter of priority.

(3) No complaint to the Regional Labour Court may be brought against the court order. A complaint may be made to the Federal Labour Court if this is permitted in the order of the Labour Court; section 72 subs. 2 and 3 of the Labour Court Act shall apply mutatis mutandis. The appeal is to be filed with the Federal Labour Court with grounds within a month of receipt of the decision of the Labour Court in its final form.

Section 123: Scope of the Social Plan

(1) A social plan established subsequent to opening of insolvency proceedings may provide for a total amount of up to two and one half month’s wages (section 10 subs. 3 of the Dismissals Protection Act) of the dismissed employees to recompense for or to attenuate their economic disadvantages under the envisaged plant modification.

(2) The obligations under such social plan are obligations incumbent on the assets involved in the insolvency proceedings. However, if no insolvency plan comes into being, no more than one third of the assets involved in the insolvency proceedings available for distribution among the creditors of the insolvency proceedings without such social plan may be used for the settlement of social plan claims. If the total amount of all social plan claims exceeds such limit each claim shall be reduced on a proportionate basis.

(3) As soon as adequate cash funds are available in the assets involved in the insolvency proceedings the insolvency administrator shall make advance payments on social plan claims with the consent of the insolvency court. No execution into the assets involved in the insolvency proceedings for social plan claims shall be permitted.

Section 124: Social Plan Established prior to the Opening of Insolvency Proceedings

(1) A social plan established prior to the opening of insolvency proceedings, but not earlier than three months before the opening of insolvency proceedings was requested, may be revoked by both the insolvency administrator and the works council.

(2) If such social plan is revoked the employees entitled to claims under the social plan may be taken into account when a social plan is established during the insolvency proceedings.

(3) Benefits received by an employee on his claim under a revoked social plan before the opening of insolvency proceedings may not be claimed to be restituted due to the revocation. Upon the establishment of a new social plan such benefits received by a dismissed employee shall be set off against the calculation of the total amount of social plan claims under section 123 subs. 1 up to two and a half months’ wages.

Section 125: Reconciliation of Interests and Dismissals Protection

(1) If a plant modification is envisaged (section 111 of the Industrial Constitution Act) and if the insolvency administrator and the works council reach an agreement on reconciliation of interests in which the employees who are to receive notice are listed by name, section 1 of the Dismissals protection Act shall be applied, subject to the following provisos:

1. it shall be presumed that termination of the employment of the employees who are listed by name depends on urgent requirements of the plant which stand in the way of further employment on this site or of further employment under unchanged working conditions;

2. the social selection of the employees shall only be examined on the basis of duration of service, age and maintenance obligations, and in this respect only for gross errors; it shall not be regarded as grossly in error if a balanced personnel structure is maintained or created.

The first sentence shall not apply if the circumstances have changed considerably since the reconciliation of interests was brought into being.

(2) Reconciliation of interests pursuant to subs. 1 shall replace the statement of the works council pursuant to section 17 subs. 3 second sentence of the Dismissals Protection Act.

Section 126: Judicial Orders Deciding on Dismissal Protection

(1) If the plant did not elect a works council or if for other reasons reconciliation of interests pursuant to section 125 is not achieved within three weeks of opening of the negotiations or written request to open negotiations, in spite of the fact that the administrator provided comprehensive information in good time to the works council, the insolvency administrator may request a decision on the part of the Labour Court to the effect that termination of contracts covering certain employees designated in his request is conditioned by urgent operational requirements and justified under social aspects. The social selection of the employees shall only be examined on the basis of duration of service , age and maintenance obligations.

(2) The provisions of the Labour Court Act governing decisions by order shall apply mutatis mutandis. The insolvency administrator, the works council and those designated employees not recognizing the termination of their contracts as justified shall be parties to the proceedings. Section 122 subs. 2 third sentence and subs. 3 shall apply mutatis mutandis.

(3) Section 12 a subs. 1 first and second sentences of the Labour Court Act shall apply mutatis mutandis to the costs incurred by the parties concerned during the first stage of proceedings. During proceedings before the Federal Labour Court the provisions contained in the Code of Civil Procedure governing the reimbursement of costs shall apply mutatis mutandis.

Section 127: Action brought by an Employee

(1) If the insolvency administrator gives notice to an employee listed in the application pursuant to section 126 subs. 1, and if the employee files an action to determine that employment has not been terminated by dismissal, or that the change in the working conditions is socially unjustified, the legally binding decision in proceedings pursuant to section 126 shall be binding on the parties. This shall not apply if the circumstances have changed considerably since the last oral hearing.

(2) If the employee has already filed an action prior to the decision taken in proceedings pursuant to section 126 becoming legally binding, at the request of the administrator the proceedings on the action shall be suspended until this time.

Section 128: Sale of plant

(1) Application of sections 125 to 127 shall not be excluded by the plant modification on which the reconciliation of interests or application for determination is based not being carried out until subsequent to sale of plant. The plant buyer shall be a party to the proceedings pursuant to section 126.

(2) In the case of a transfer of plant, the presumption in accordance with section 125 subs. 1 first sentence No. 1 or the court decision pursuant to section 126 subs. 1 first sentence shall also imply that termination of employment does not occur because of the transfer of plant.

Chapter Three: Contest of Transactions in Insolvency Proceedings

Section 129: Policy

(1) Transactions made prior to the opening of insolvency proceedings and disadvantaging the creditors of the insolvency proceedings may be contested by the insolvency administrator under sections 130 to 146.

(2) An omission shall be deemed equivalent to an active transaction.

Section 130: Congruent Coverage

(1) A transaction granting or facilitating a creditor of the insolvency proceedings with a security or satisfaction may be contested

1. if it was made during the last three months prior to the request to open insolvency proceedings, if the debtor was illiquid on the date of the transaction, and if the creditor was aware of his illiquidity on this date, or

2. if it was made after the request to open insolvency proceedings, and if the creditor was aware of the debtor’s illiquidity on the date of the transaction, or of the request to open insolvency proceedings.

(2) Awareness of circumstances pointing directly to illiquidity or to a request to open insolvency proceedings shall be considered equivalent to awareness of illiquidity or of the request to open insolvency proceedings.

(3) A person with a close relationship to the debtor existing on the date of such transaction (section 138) shall be presumed to have been aware of the debtor’s illiquidity or of the request to open insolvency proceedings.

Section 131: Incongruent Coverage

(1) A transaction granting or facilitating a creditor of the insolvency proceedings a security or satisfaction without his entitlement to such security or satisfaction, or to the kind or date of such security or satisfaction, may be contested if such transaction was made

1. during the last month prior to the request to open insolvency proceedings or after such request;

2. within the second or third month prior to the request to open insolvency proceedings, and the debtor was illiquid on the date of the transaction;

3. within the second or third month prior to the request to open insolvency proceedings, and the creditor was aware of the disadvantage to the creditors of the insolvency proceedings arising from such transaction on its date.

(2) For application of subs. 1 No. 3, awareness of circumstances pointing directly to the disadvantage shall be considered equivalent to awareness of the disadvantage to the creditors of the insolvency proceedings. A person with a close relationship to the debtor on the date of such transaction (section 138) shall be presumed to have been aware of the disadvantage to the creditors of the insolvency proceedings.

Section 132: Transactions Constituting a Direct Disadvantage to the Creditors of the Insolvency Proceedings

(1) Legal transactions on the part of the debtor constituting a direct disadvantage to creditors of the insolvency proceedings may be contested if they were made

1. during the last three months prior to the request to open insolvency proceedings, if the debtor was illiquid on the date of such transaction, and if the other party was aware of such illiquidity on this date, or

2. subsequent to the request to open insolvency proceedings, and if at the time when the legal transaction was made the other party was aware of such illiquidity or of the request to open insolvency proceedings.

(2) Legal transactions constituting a direct disadvantage to creditors of the insolvency proceedings shall be deemed equivalent to any other transaction of the debtor divesting the debtor of a right or barring the debtor’s claim to such right for the future or maintaining a property claim against the debtor or rendering such claim enforceable against the debtor.

(3) Section 130 subs. 2 and 3 shall apply mutatis mutandis.

Section 133: Wilful Disadvantage

(1) A transaction made by the debtor during the last ten years prior to the request to open insolvency proceedings, or subsequent to such request, with the intention to disadvantage his creditors may be contested if the other party was aware of the debtor’s intention on the date of such transaction. Such awareness shall be presumed if the other party knew of the debtor’s imminent illiquidity, and that the transaction constituted a disadvantage for the creditors.

(2) An onerous contract entered into by the debtor with a person with a close relationship to him (section 138) directly constituting a disadvantage for the creditors of the insolvency proceedings may be contested. Such contest shall be excluded if the contract was entered into earlier than two years prior to the request to open insolvency proceedings, or if the other party was not aware of the debtor’s intention to disadvantage the creditors on the date of such contract.

Section 134: Gratuitous Benefit

(1) A gratuitous benefit granted by the debtor may be contested unless it was made earlier than four years prior to the request to open insolvency proceedings.

(2) If such benefit comprises a usual casual gift of minor value the gift may not be contested.

Section 135: Loans Replacing Equity Capital

A transaction may be contested which, in consideration of a partner’s claim to restitution of his loan replacing equity capital or in consideration of an equivalent claim,

1. provided a security if such transaction was made during the last ten years prior to the request to open insolvency proceedings or subsequent to such request;

2. provided satisfaction if such transaction was made during the last year prior to the request to open insolvency proceedings or subsequent to such request.

Section 136: Silent Partnership

(1) A transaction may be contested by means of which a part or all of a silent partner’s interest was restituted to him or by means of which a part or all of a silent partner’s share in accrued losses was waived if the basic agreement was made during the last year prior to the request to open insolvency proceedings for the property owned by the manager of the business or subsequent to such request. This shall also apply if such agreement resulted in the liquidation of the silent partnership.

(2) Contention shall be excluded if a reason to open insolvency proceedings became existent only subsequent to the agreement.

Section 137: Payments on Bills of Exchange and Cheques

(1) The debtor’s payment on bills of exchange may not be claimed to be restituted by the recipient under section 130 if the law governing bills of exchange would have barred the recipient’s claims arising from the bill against other indorsers, the drawer or drawee if he had refused the debtor’s payment.

(2) However, the amount paid on a bill shall be restituted by the last indorser or, if he indorsed the bill on account of a third party, by such party if the last indorser or the third party was aware or, due to gross negligence, unaware of the debtor’s illiquidity or of the request to open insolvency proceedings on indorsing the bill or having it indorsed. Section 130 subs. 2 and 3 shall apply mutatis mutandis.

(3) Subs. 1 and 2 shall apply mutatis mutandis to payments on cheques on the part of the debtor.

Section 138: Persons with a Close Relationship to the Debtor

(1) If the debtor is an individual, persons with a close relationship to the debtor shall be:

1. the debtor’s spouse even if the marriage was contracted only after the transaction or as dissolved during the last year prior to the transaction;

2. the ascendants or descendants of the debtor or of the spouse designated at No. 1, the brothers and sisters related by consanguinity and affinity to the debtor and the spouse designated at No. 1, and the spouses of such persons;

3. persons living in the debtor’s household or having lived in the debtor’s household during the last year prior to the transaction.

(2) If the debtor is a corporation or a company without legal personality, the persons with a close relationship to the debtor shall be:

1. the members of the body representing or supervising the debtor, as well as his general partners and persons holding more than one quarter of the debtor’s capital;

2. a person or a company having on the basis of a comparable association with the debtor under company law or under a service contract the opportunity to become aware of the debtor’s financial circumstances;

3. a person having a personal relationship detailed at subs. 1 with a person named at No. 1 or 2; this shall not apply if the persons named at No. 1 or 2 are legally bound to secrecy regarding the debtor’s affairs.

Section 139: Calculation of Time Periods prior to the Request to Open Insolvency Proceedings

(1) The periods of time given in sections 88 and 130 to 136 shall commence on the beginning of the day corresponding by its number to the day when the request to open insolvency proceedings was received by the insolvency court. During a month lacking such day the time period shall commence on the beginning of the following day.

(2) If several requests to open insolvency proceedings have been received, the first admissible request containing grounds for opening insolvency proceedings shall be relevant even if the proceedings were opened due to a subsequent request. A request refused with final effect shall be taken into account only if such request was refused due to lacking assets involved in the insolvency proceedings.

Section 140: Date of Performance of Transaction

(1) A transaction shall be deemed performed on the date when its legal effects become existent.

(2) If legal effectiveness of a transaction requires registration in the Land Register, in the ship or shipbuilding register or in the register of liens on aircraft, such transaction shall be deemed performed as soon as the other conditions of its legal effectiveness are met, the debtor’s declaration of intent has become binding upon him, and the other party has requested registration of such transaction. If the registration of a priority notice was requested in order to secure the claim on the change in rights, the first sentence shall apply with the proviso that such request for priority notice shall replace the request to register the transaction.

Section 141: Executable Deed

Contestation shall not be excluded if an executable deed was acquired for the transaction, or if the transaction was performed by way of execution.

Section 142: Cash Transactions

Payments on the part of the debtor in return for which his property benefitted directly from an equitable consideration may only be contested under the conditions of section 133 subs. 1.

Section 143: Legal Consequences

(1) Any property of the debtor sold, transferred or relinquished under the transaction subject to contest must be restituted to the assets involved in the insolvency proceedings. The provisions governing the legal consequences of unjust enrichment with the recipient being aware of a lacking legal justification shall apply mutatis mutandis.

(2) The recipient of a gratuitous benefit shall restitute such benefit only to the extent of his enrichment. This shall not apply if he is aware or must be aware under the circumstances that the gratuitous benefit places the creditors at a disadvantage.

Section 144: Claims of the Party to the Contested Transaction

(1) If the recipient of a benefit under a transaction subject to contest restitutes the property received, his claim shall revive.

(2) Considerations shall be refunded from the assets involved in the insolvency proceedings to the extent to which such consideration continues to exist in a distinct form among the assets involved in the insolvency proceedings, or to which such assets were augmented by its value. Further claims of the recipient of a benefit under a transaction which is subject to contest in respect of restitution of his consideration may be brought by such recipient only as a creditor of the insolvency proceedings.

Section 145: Transactions Contested and Enforced against Legal Successors

(1) A transaction may be contested against the heir or other comprehensive legal successor of the other party to such transaction.

(2) A transaction may be contested against another legal successor if such legal successor

1. was aware of the circumstances giving rise to the enrichment of his predecessor being subject to contention, on the date of his enrichment;

2. belonged to the persons with a close relationship to the debtor (section 138) on the date of his enrichment unless he was unaware of the circumstances giving rise to the enrichment of his predecessor being subject to contest on such date;

3. received the enrichment by way of a gratuitous transfer.

Section 146: Limitation of the Right to Contest

(1) The right to contest a transaction shall be subject to limitation after two years from the opening of the insolvency proceedings.

(2) Even if the right to contest has become subject to limitation, the insolvency administrator may refuse performance of an obligation in consideration of a benefit under a transaction subject to contest,

Section 147: Transactions carried out subsequent to the Opening of Insolvency Proceedings

(1) Transactions carried out after the opening of the insolvency proceedings and having legal effect under sections 892 and 893 of the Civil Code, 16 and 17 of the Act Governing Rights in Registered Ships and Ships Under Construction and 16 and 17 of the Act Governing Rights in Aircraft may be contested in accordance with the provisions governing the contest of transactions carried out before the insolvency proceedings were opened.

(2) The limitation period under section 146 subs. 1 shall begin on the date when the transaction became legally effective.

Part Four: Management and Disposition of the Assets involved in the Insolvency Proceedings

Chapter One: Arrestment of the Assets involved in the Insolvency Proceedings

Section 148: Transfer of the Assets involved in the Insolvency Proceedings

(1) Subsequent to the opening of the insolvency proceedings the insolvency administrator shall immediately assume possession and management of the whole property forming part of the assets involved in the insolvency proceedings.

(2) Using an executable duplicate of the order opening the insolvency proceedings the administrator shall be entitled to enforce by way of execution the dereliction of the chattels held in the debtor’s custody. Section 766 of the Code of Civil Procedure shall apply with the proviso that the enforcement judge shall be replaced by the insolvency court.

Section 149: Objects of Value

(1) The creditors’ committee may determine the agency and conditions of deposit or investment of currency, securities and objects of value. If a creditors’ committee has not been appointed, or has not yet taken a decision to this effect the insolvency court may give such orders.

(2) If a creditors’ committee has been appointed the insolvency administrator shall only be entitled to receive currency, securities or objects of value from the agency of the deposit or investment if a member of the creditors’ committee also signs the receipt. The administrator’s orders to such agency shall require the cosignature of a member of the creditors’ committee in order to become legally effective.

(3) The creditors’ assembly may decide otherwise.

Section 150: Sealing

In order to secure property forming part of the assets involved in the insolvency proceedings the insolvency administrator may have seals applied by the sheriff or any other legally authorised person. The document evidencing such sealing or the removal of seals shall be deposited by the administrator with the registry of the court for the parties’ inspection.

Section 151: Record of the Assets Involved in the Insolvency Proceedings

(1) The insolvency administrator shall establish a record of each object forming part of the assets involved in the insolvency proceedings. The debtor shall attend the establishment of such record if his attendance does not delay the proceedings to their detriment.

(2) The value of each object shall be indicated. If the value depends on whether the debtor’s enterprise is continued or closed down, both amounts shall be indicated. An expert may be charged with the assessment of objects whose value may be assessed only with particular difficulty.

(3) At the administrator’s request the insolvency court may waive the establishment of the record; grounds are to be given for the request. If a creditors’ committee was appointed the administrator may submit such request only with the consent of the creditors’ committee.

Section 152: Record of Creditors

(1) The insolvency administrator shall establish a record of all the debtor’s creditors of whom he is aware by inspection of the debtor’s records and business documents, by any other indication of the debtor, by filing their claims or in any other way.

(2) The record shall itemize the creditors with a claim to separate satisfaction and each category of lower-ranking creditors of the insolvency proceedings. The address of each creditor as well as the reason and the amount of claim shall be indicated. For creditors with a claim to separate satisfaction also the object subject to the claim of separate satisfaction and the amount of their probable nonsatisfaction shall be indicated; section 151 subs. 2 second sentence shall apply mutatis mutandis.

(3) In addition, the record shall indicate any situation enabling the set-off of claims against each other. The amount of the obligations incumbent on the assets involved in the insolvency proceedings shall be estimated if the debtor’s property is disposed of in an expeditious way.

Section 153: Survey of Property

(1) As of the date when the insolvency proceedings were opened the insolvency administrator shall establish an ordered survey indicating the objects forming part of the assets involved in the insolvency proceedings and the debtor’s obligations and balancing them. Section 151 subs. 2 shall apply mutatis mutandis to the assessment of the value of objects; section 152 subs. 2 first sentence shall apply mutatis mutandis to the itemization of the debtor’s obligations.

(2) After the establishment of the survey of property the insolvency court, at the administrator’s or a creditor’s request, may order the debtor’s affidavit regarding the completeness of the survey of property. Sections 98 and 101 subs. 1 first and second sentences shall apply mutatis mutandis.

Section 154: Deposit with the Registry of the Insolvency Court

The record of the assets involved in the insolvency proceedings, the record of creditors and the survey of property shall be deposited with the registry of the insolvency court for the parties’ inspection at the latest one week prior to the report meeting.

Section 155: Accounting under Commercial and Fiscal Law

(1) The debtor’s obligations under commercial and fiscal law to keep and render accounts shall remain unaffected. With respect to the assets involved in the insolvency proceedings such obligations shall be incumbent on the insolvency administrator.

(2) A new financial year shall begin when the insolvency proceedings are opened. However, the period elapsed prior to the report meeting shall not be taken into account in legal periods provided for the establishment or publication of financial statements.

(3) Section 318 of the Commercial Code shall apply to the appointment of the balance sheet auditor in the insolvency proceedings with the proviso that such auditor shall be appointed exclusively by the Register Court at the administrator’s request. If an auditor was appointed for the financial year prior to the opening of the insolvency proceedings the validity of such appointment shall remain unaffected by the opening of the insolvency proceedings.

Chapter Two: Decision on Disposition

Section 156: Report Meeting

(1) At the report meeting the insolvency administrator shall report on the economic situation of the debtor and its causes. He shall assess any prospects of maintaining the debtor’s enterprise as a whole or in part, indicate any possibility of drawing up an insolvency plan and describe the effects of each solution on the satisfaction of the creditors.

(2) The debtor, the creditors’ committee, the works council and the spokesmen of officers shall be given the opportunity to make their statements on the administrator’s report at the report meeting. If the debtor is a trader, craftsman or farmer, the competent official professional representative body of industry, trade, the craft or of agriculture may also be given the opportunity to express their views at the report meeting.

Section 157: Decision on the Further Proceedings

At the report meeting the creditors’ assembly shall decide whether the debtor’s enterprise should be closed down or temporarily continued. The assembly may commission the administrator to draw up an insolvency plan and determine the plan’s objective for him. The assembly may modify its decisions at subsequent meetings.

Section 158: Measures prior to the Decision

(1) If the insolvency administrator intends to close the debtor’s enterprise prior to the report meeting he shall obtain the consent of the creditors’ committee if appointed.

(2) Before the creditors’ committee takes its decision or, if such committee has not been appointed, before closing down the enterprise the administrator shall inform the debtor thereof. At the request of the debtor and after hearing the administrator the insolvency court shall refuse such close-down of the enterprise if the close-down can be suspended until the report meeting without considerably reducing the assets involved in the insolvency proceedings.

Section 159: Disposition of the Assets Involved in the Insolvency Proceedings

After the report meeting the administrator shall immediately liquidate the property forming the assets involved in the insolvency proceedings, unless such disposition contradicts any decisions taken by the creditors’ assembly.

Section 160: Transactions of Particular Importance

(1) The insolvency administrator shall obtain the consent of the creditors’ committee if he intends to engage in transactions which are of particular importance to the insolvency proceedings. If no creditors’ committee has been appointed, he shall obtain the consent of the creditors’ assembly.

(2) Consent under subs. 1 shall be required in particular

1. if such transaction purports to sell the enterprise, plant, the entire stock, a part of real property to be disposed of by private sale, the debtor’s shares in another enterprise if such shares are intended to bring about a permanent affiliation to such other enterprise or the entitlement to receive recurring earnings;

2. if such transaction purports to enter into a loan contract with considerable burdens on the assets involved in the insolvency proceedings;

3. if such transaction purports to bring or join a court action amounting to a considerable value in dispute, to refuse the bringing of such action, or to negotiate a settlement or compromise to settle or avoid any such action.

Section 161: Provisional Prohibition of the Transaction

In any of the cases covered by section 160 the insolvency administrator shall inform the debtor before the creditors’ committee or assembly take a decision if such information is possible without delaying the insolvency proceedings to their detriment. If the creditors’ assembly has not given its consent, at the request of the debtor or of a majority of creditors qualifying under section 75 subs. 1 No. 3 and after hearing the administrator the insolvency court may provisionally prohibit the transaction and convene a creditors’ assembly for a decision to be taken on the transaction.

Section 162: Sale of Plant to Persons with Specific Interests

(1) The sale of the enterprise or plant shall require the approval of the creditors’ assembly if the purchaser or a person holding at least one fifth of the purchaser’s capital

1. belongs to the persons with a close relationship to the debtor (section 138);

2. is a creditor with a right to separate satisfaction or a creditor of the insolvency proceedings with non-lower ranking claims whose rights to separate satisfaction and claims are assessed by the insolvency court to reach a total of one fifth of the sum of the value of all rights to separate satisfaction and of the amounts of the claims of all creditors of the insolvency proceedings with non-lower ranking claims.

(2) A person shall also be deemed to hold, shares of the purchaser for the purpose of subs. 1 if an enterprise controlled by the person or a third party holds shares of the purchaser on behalf of the person or of the controlled enterprise.

Section 163: Sale of Plant below Value

(1) At the request of the debtor or of a majority of creditors qualifying under section 75 subs. 1 No. 3 and after hearing the insolvency administrator the insolvency court may order that the envisaged sale of the enterprise or of plant shall require the approval of the creditors’ assembly if the requesting party proves to the satisfaction of the court that a sale to another purchaser would be more beneficial to the assets involved in the insolvency proceedings.

(2) If the requesting party has incurred costs for such request, he shall be entitled to reimbursement of such costs by the assets involved in the insolvency proceedings as soon as the court issues its order.

Section 164: Legal Validity of the Transaction

A contravention of sections 160 to 163 shall leave the validity of the acts of the insolvency administrator unaffected.

Chapter Three: Objects Subject to a Right to Separate Satisfaction

Section 165: Disposition of Immovables

The insolvency administrator may initiate with the competent court auctions or sequestrations of immovables forming part of the assets involved in the insolvency proceedings even if such immovables are subject to a right to separate satisfaction.

Section 166: Disposition of Movables

(1) The insolvency administrator may dispose of a movable item subject to a right to separate satisfaction without restriction if he holds its possession.

(2) The insolvency administrator may collect or in another way dispose of a claim assigned by the debtor in order to secure a claim. This shall not apply if the claim has been assigned to the participant in a system in accordance with section 96 subs. 2 second or third sentence in order to safeguard his claims from the system or to the central bank of a Member State of the European Union or a Contracting Party of the Agreement on the European Economic Area or to the European Central Bank.

Section 167: Notification of the Creditor

(1) If the insolvency administrator is entitled to dispose of a movable item under section 166 subs. 1 he shall notify the condition of the movable item to the creditor with a right to separate satisfaction at the latter’s request. Instead of such notification the administrator may allow the creditor to inspect the object.

(2) If the administrator is entitled to collect a claim under section 166 subs. 2 he shall notify the claim to the creditor with a right to separate satisfaction at the latter’s request. Instead of such notification he may allow the creditor to inspect the debtor’s books and business documents.

Section 168: Notification of Envisaged Sale

(1) Before the insolvency administrator sells an object with regard to which he is entitled to disposition under section 166 to a third party he shall notify how such envisaged sale is to be carried out to the creditor with a right to separate satisfaction. He shall give the creditor the opportunity of pointing out within a week another means of selling the object which would be more beneficial to the creditor.

(2) If such notification is given, within a week or in good time before the sale, the administrator shall take advantage of such opportunity or recompense the creditor as if he had taken advantage of it.

(3) Such other opportunity of disposition may also consist in the object’s devolution to the creditor himself. An opportunity to sell shall also be deemed more beneficial if savings are made on expenses.

Section 169: Protection of the Creditor Against Delayed Disposition

If an object with regard to which the insolvency administrator is entitled to disposition under section 166 is not disposed of by him, the creditor shall be paid the current interest due to him from the assets involved in the insolvency proceedings beginning from the report meeting. If the insolvency court issued an order under section 21 prohibiting the creditor to dispose of the object before the insolvency proceedings were opened the interest due shall be paid at the latest from the date three months after such order by the court. The first and second sentences shall not apply to the extent to which, in view of the amount of the creditor’s claim, the value and any other right encumbering the object will probably not be sufficient in order to satisfy the creditor by the proceeds of the disposition.

Section 170: Distribution of Proceeds

(1) Subsequent to disposition of a movable item or a claim by the insolvency administrator the costs of determining and disposing of the object shall be credited to the assets involved in the insolvency proceedings in advance using the proceeds. The remaining amount shall be used without delay to satisfy the creditor with a right to separate satisfaction.

(2) If the insolvency administrator transfers an object with regard to which he is entitled to disposition under section 166 to the creditor to be disposed of by the latter, the creditor shall contribute an amount covering the costs of determination and turnover tax (section 171 subs. 2 third sentence) in advance to the assets involved in the insolvency proceedings using the proceeds gained by him.

Section 171: Calculation of the Contribution to Costs

(1) The costs of determination comprise the costs of the actual identification of the object and of the determination of any rights encumbering the object. Such costs shall be rated as a lump sum of four percent of the proceeds.

(2) The costs of disposition shall be rated as a lump sum of five percent of the proceeds. If the costs actually incurred which were necessary for the disposition were considerably lower or considerably higher, these costs shall be taken as a basis. If disposition entails the assets involved in the insolvency proceedings incurring turnover tax, this amount shall be charged in addition to the lump sum pursuant to sentence one or the costs actually incurred pursuant to sentence two.

Section 172: Other Use of Movables

(1) The insolvency administrator may use a movable item with regard to which he is entitled to disposition for the assets involved in the insolvency proceedings if the loss in value accruing from such use is recompensed by current payments to the creditor beginning from the opening of the insolvency proceedings. Such obligation to recompensing payments shall only exist to the extent to which the loss in value accruing from such use impairs the security of the creditor with a right to separate satisfaction.

(2) The administrator shall be entitled to combine, merge and transform such object with other property so long as such change of the condition of the object does not impair the security of the creditor with a right to separate satisfaction. If the creditor’s right devolves to other property the creditor shall transfer such new security to the administrator to the extent to which its value exceeds the previous value.

Section 173: Disposition by the Creditor

(1) If the insolvency administrator is not entitled to dispose of a movable item or a claim subject to a claim to separate satisfaction the creditor’s right to dispose of such object shall remain unaffected.

(2) At the administrator’s request and after hearing the creditor the insolvency court may determine a period of time during which the creditor has to dispose of the object. Upon expiry of such period of time the administrator shall be entitled to its disposition.

Part Five: Satisfaction of the Creditors of the Insolvency Proceedings. Discontinuation of the Proceedings

Chapter One: Determination of Claims

Section 174: Filing of Claims

(1) The claim of a creditor of the insolvency proceedings must be filed in writing with the insolvency administrator. Such filing shall be accompanied by copies of the documents evidencing the claim.

(2) Upon its filing the reason and the amount of the claim shall be indicated, as shall the facts from which in the view of the creditor it emerges that it is based on an unauthorised act on the part of the debtor committed with intent.

(3) Lower-ranking creditors shall file their claims only if specifically requested by the insolvency court to do so. Upon filing such claims their lower-ranking status shall be indicated, and the creditor’s lower rank shall be designated.

Section 175: Schedule

(1) The insolvency administrator shall enter any registered claim into a schedule with the indications under section 174 subs. 2 and 3. Such schedule shall be deposited with the registry of the insolvency court, together with the applications and enclosed certificates for the parties’ inspection within the first third of the period of time between the expiry of the filing period and the verification meeting.

(2) If a creditor has registered a claim from an unauthorised act committed with intent, the insolvency court shall indicate to the debtor the legal consequences of section 302 and the possibility of an objection.

Section 176: Proceedings of the Verification Meeting

During the verification meeting the filed claims shall be verified in accordance with their amount and rank. Claims denied by the insolvency administrator, by the debtor or by a creditor of the insolvency proceedings shall be discussed individually.

Section 177: Subsequent Filings

(1) During the verification meeting verification shall also include claims filed after expiry of the filing period. However, if the insolvency administrator or a creditor of the insolvency proceedings objects to the verification of such claims, or if a claim is filed only after the verification meeting, the insolvency court shall either docket a special verification meeting or order verification in written proceedings, and burden the defaulter with the costs. The first and second sentences shall apply mutatis mutandis to subsequent amendments to filed claims.

(2) If the insolvency court requested lower-ranking creditors to file their claims in accordance with section 174 subs. 3, and if the period of time determined for such filings expires later than one week prior to the verification meeting, the court shall either docket a special verification meeting or order verification in written proceedings, and burden the assets involved in the insolvency proceedings with its costs .

(3) The date of the special verification meeting shall be published. The creditors of the insolvency proceedings filing claims, the insolvency administrator and the debtor shall receive individual summons to such meeting. Section 74 subs. 2 second sentence shall apply mutatis mutandis.

Section 178: Prerequisites and Effects of Determination of Claims

(1) A claim shall be deemed to have been determined if no denial is made by the insolvency administrator or by a creditor of the insolvency proceedings during the verification meeting, or in the written proceedings (section 177) or if any denial made by a party is removed. The debtor’s denial shall not bar determination of a claim.

(2) For each filed claim the insolvency court shall enter in the schedule the extent to which a claim was determined with its amount or rank, or which party objected to its determination. An objection on the part of the debtor shall also be entered in the schedule. Determination shall be marked on bills of exchange and any other debt instruments by the registrar of the insolvency court.

(3) For claims determined with their amount and rank, entry into the schedule shall have the legal effect of a final judgment with respect to the insolvency administrator and all creditors of the insolvency proceedings.

Section 179: Denied Claims

(1) If a claim was denied by the insolvency administrator or by a creditor of the insolvency proceedings, initiation of proceedings to determine such claim against the denying party shall be left to the creditor.

(2) If such claim is based on an executable deed or a final judgment, following up the denial shall be incumbent on the denying party.

(3) The insolvency court shall provide the creditor whose claim was denied a certified extract from the schedule. In the case mentioned at subs. 2 the denying party shall also receive such extract. The creditors whose claims have been determined shall not be notified; the creditors’ attention shall be drawn to this prior to the verification meeting.

Section 180: Competence for the Determination of Claims

(1) An action for the determination of a claim shall be brought under the provisions governing ordinary civil proceedings. The Local Court where the insolvency proceedings are or were pending shall have exclusive jurisdiction for such action. If the subject matter of the action does not fall under the jurisdiction of the Local Courts, the Regional Court in whose district the insolvency court is located shall have exclusive jurisdiction.

(2) If an action concerning such claim was pending on the date when the insolvency proceedings were opened, determination of the claim shall be initiated by the joinder of such action.

Section 181: Scope of Determination

Determination of a claim with its grounds, amount and rank may only be applied for to the extent indicated when it was filed or during the verification meeting.

Section 182: Value of Action

The value of an action to determine a claim whose legal validity was denied by the insolvency administrator or by a creditor of the insolvency proceedings shall depend on the amount to be expected for the claim as a result of distribution of the assets involved in the insolvency proceedings.

Section 183: Effect of the Decision

(1) A decision with final and binding effect determining a claim or sustaining an objection shall be effective with respect to the insolvency administrator and all creditors of the insolvency proceedings.

(2) The prevailing party shall request amendment of the schedule with the insolvency court.

(3) If only individual creditors have pursued the action, but not the insolvency administrator, these creditors may claim reimbursement of their costs from the assets involved in the insolvency proceedings to the extent to which such assets have benefitted from the judicial decision.

Section 184: Action to Enforce a Claim Denied by the Debtor

If the debtor denied a claim during the verification meeting or in the written proceedings (section 177) the creditor may bring an action against the debtor in order to determine such claim. If an action concerning such claim was pending on the date when the insolvency proceedings were opened the creditor may continue such action against the debtor.

Section 185: Special Jurisdiction

If an action for the determination of a claim could not be brought under the provisions governing ordinary civil proceedings its determination shall be initiated with any other court having jurisdiction or with the competent administrative agency. Sections 180 subs. 2 and sections 181, 183 and 184 shall apply mutatis mutandis. If another court has jurisdiction to determine such claim section 182 shall also apply mutatis mutandis.

Section 186: Restitutio in Integrum

(1) If the debtor did not attend the verification meeting the insolvency court, at his request, shall grant him restitutio in integrum. Sections 51 subs. 2, 85 subs. 2 and 233 to 236 of the Code of Civil Procedure shall apply mutatis mutandis.

(2) The writs concerning a request of restitutio in integrum shall be served on the creditor whose claim is to be subsequently contested. Contestation in such writs shall be deemed equivalent to denial during the verification meeting if restitutio in integrum is granted.

Chapter Two: Distribution

Section 187: Satisfaction of the Creditors of the Insolvency Proceedings

(1) Satisfaction of the creditors of the insolvency proceedings may be initiated only after the general verification meeting.

(2) Funds may be distributed among the creditors of the insolvency proceedings as soon as sufficient cash is available in the assets involved in the insolvency proceedings. Lower-ranking creditors of the insolvency proceedings shall not be considered for advance distributions.

(3) Distributions shall be carried out by the insolvency administrator. Before each distribution he shall obtain the consent of the creditors’ committee if appointed.

Section 188: Distribution Record

Prior to distribution the insolvency administrator shall establish a record of the claims to be considered in respect of distribution. Such record shall be deposited with the registry of the insolvency court for the parties’ inspection. The administrator shall publish the total amount of claims and the amount available for distribution from the assets involved in the insolvency proceedings.

Section 189: Consideration of Denied Claims

(1) An insolvency creditor whose claim has not been determined and is not based on an executable deed or a final judgment shall, at the latest within a limitation period of two weeks from publication, prove to the insolvency administrator that and for which amount he has brought an action to determine the claim or joindered the proceedings to a previously pending action.

(2) If proof is provided in good time, the share allocated to such claim shall be retained from distribution as long as such action is pending.

(3) If proof is not provided in good time, the claim shall not be taken into account in distribution.

Section 190: Consideration of Creditors with a Right to Separate Satisfaction

(1) A creditor with a right to separate satisfaction shall, at the latest within the limitation period under section 189 subs. 1, prove to the insolvency administrator that and for which amount he has waived separate satisfaction or his claim was not met by such separate satisfaction. If proof is not provided in good time, the claim shall not be taken into account in distribution.

(2) The creditor shall be deemed to have met his obligation under subs. 1 in order to share in advance distribution if he, at the latest within such limitation period, proves to the insolvency administrator that disposition of the object subject to a right to separate satisfaction is being initiated, and which amount of his claim is likely not to be satisfied. In such a case the share covering the amount of his claim shall be retained in distribution. If the conditions under subs. 1 are not met at final distribution the retained share shall be free to flow into the final distribution.

(3) If only the insolvency administrator is entitled to dispose of an object subject to a right to separate satisfaction, subs. 1 and 2 shall not apply. In the case of advance distribution, if the administrator has not yet disposed of the object, he shall estimate the extent to which the creditor’s claim will not be met by separate satisfaction and retain the share covering such claim.

Section 191: Consideration of Claims Subject to a Condition Precedent

(1) The full amount of claims subject to a condition precedent shall be taken into account in the case of advance distribution. The share covering the claim shall be retained in distribution.

(2) Claims subject to a condition precedent shall not be taken into account during final distribution if the possibility of accomplishment of the condition is so distant that the claim is valueless on the date of distribution. In such a case the share retained under subs. 1 second sentence shall be free to flow into final distribution.

Section 192: Subsequent Consideration

Creditors not taken into account in advance distribution and who meet the conditions under sections 189 and 190 shall in the next distribution be advanced an amount from the remainder of the assets involved in the insolvency proceedings placing them on an equal footing with the other creditors.

Section 193: Amendments to the Distribution Record

The insolvency administrator shall append any amendment to the record required under sections 189 to 192 within three days of the expiry of the limitation period mentioned at section 189 subs. 1.

Section 194: Objections to the Distribution Record

(1) In the case of advance distribution, a creditor shall bring his objection to the record to the notice of the insolvency court within one week after expiry of the limitation period mentioned at section 189 subs. 1.

(2) A judicial decision overruling objections shall be served on the creditor and the insolvency administrator. The creditor may bring an immediate appeal against such a decision.

(3) A judicial decision ordering an correction to the record shall be served on the creditor and the administrator and deposited with the registry of the insolvency court for the parties’ inspection. The administrator and the creditors of the insolvency proceedings may bring an immediate appeal against such a decision. The period of such appeal shall begin on the day of the deposit of the decision.

Section 195: Determination of a Fraction

(1) At the proposal of the insolvency administrator, the creditors’ committee shall determine the fraction to be paid in the case of advance distribution. If no creditors’ committee has been appointed, the insolvency administrator shall identify such fraction.

(2) The administrator shall bring such fraction to the notice of those creditors who have been taken into account.

Section 196: Final Distribution

(1) Final distribution shall take place as soon as the assets involved in the insolvency proceedings have been disposed of, with the exception of current income.

(2) Final distribution shall require the consent of the insolvency court.

Section 197: Final Meeting

(1) While consenting to final distribution the insolvency court shall docket a meeting for the final creditors’ assembly. During such meeting

1. the insolvency administrator’s final account shall be discussed,

2. objections to the final record may be brought, and

3. the creditors shall decide on any objects forming part of the assets involved in the insolvency proceedings not apt to be disposed of.

(2) The period of time extending between the publication of the date of the meeting and such meeting shall not fall below one month and not exceed two months.

(3) Section 194 subs. 2 and 3 shall apply mutatis mutandis to the decision of the insolvency court on objections raised by a creditor

Section 198: Deposit of Retained Funds

Funds to be retained in final distribution shall be deposited with suitable agency by the insolvency administrator on account of the parties involved.

Section 199: Surplus Resulting from Final Distribution

If the claims of all creditors of the insolvency proceedings can be satisfied in final distribution the insolvency administrator shall transfer any remaining surplus to the debtor. If the debtor is not an individual the insolvency administrator shall transfer to any person owning a share of the debtor’s capital the share of such surplus devolving to such person under liquidation outside the insolvency proceedings

Section 200: Termination of the Insolvency Proceedings

(1) As soon as final distribution has been carried out, the insolvency court shall decide on termination of the insolvency proceedings.

(2) Such decision and the reason underlying such termination shall be published. Section 9 remaining unaffected, the notification shall be published in extract form in the Federal Bulletin. Sections 31 to 33 shall apply mutatis mutandis.

Section 201: Rights of the Creditors of the Insolvency Proceedings subsequent to Termination

(1) Subsequent to termination of the insolvency proceedings, the creditors of these proceedings may enforce the remainder of their claims against the debtor without restriction.

(2) Creditors of the insolvency proceedings who have determined claims which have not been denied by the debtor during the verification meeting may enforce such claims against the debtor by way of execution on the legal basis of their entry into the schedule as under an executable judgment. A claim with an overruled objection shall be equivalent to a claim not denied. The application for the issuance of an executable copy of the schedule may not be filed until the insolvency proceedings have been terminated.

(3) Provisions on discharge of residual debt shall remain unaffected.

Section 202: Jurisdiction for Execution

(1) Under the circumstance of section 201, the Local Court where the insolvency proceedings are or were pending shall have exclusive jurisdiction for any action

1. brought to obtain the clause of execution;

2. brought to deny the accomplishment of the prerequisites to grant such clause after it was obtained;

3. brought to enforce any objection to the claim itself.

(2) If the subject matter of such action does not fall within the jurisdiction of the Local Courts, exclusive jurisdiction shall be vested in the Regional Court in whose district the insolvency court is located.

Section 203: Order to Carry Out Delayed Distribution

(1) At the request of the insolvency administrator or of a creditor of the insolvency proceedings or ex officio the insolvency court shall order delayed distribution if after the final meeting

1. retained funds become available for distribution.

2. funds paid from the assets involved in the insolvency proceedings flow back to them, or

3. objects forming part of the assets involved in the insolvency proceedings are identified.

(2) Termination of the insolvency proceedings shall not bar issuance of an order to carry out delayed distribution.

(3) The court may refrain from issuing such order and transfer the available amount or identified object to the debtor if such proceedings appear to the court to be adequate given the low value of the amount or of the object and the costs of delayed distribution. It may condition its order on the advancement of funds covering the costs of such delayed distribution.

Section 204: Appeal

(1) The decision refusing to carry out delayed distribution shall be served on the requesting party. Such party may bring an immediate appeal against the decision.

(2) The decision ordering delayed distribution shall be served on the insolvency administrator, the debtor and any creditor requesting such delayed distribution. The debtor may bring an immediate appeal against the decision.

Section 205: Implementation of Delayed Distribution

Once delayed distribution has been ordered, the insolvency administrator shall distribute the available amount or the proceeds from disposition of the identified object on the basis of the final record. He shall render account of such distribution to the insolvency court.

Section 206: Exclusion of Creditors of the Assets Involved in the Insolvency Proceedings

Creditors of the assets involved in the insolvency proceedings of whose claims the insolvency administrator has become aware

1. only after determination of the fraction in advance distribution,

2. only after the final meeting had been closed during final distribution, or

3. if delayed distribution was ordered, only after its publication

may claim satisfaction only from the funds remaining as assets involved in the insolvency proceedings.

Chapter Three: Discontinuation of Insolvency Proceedings

Section 207: Discontinuation for Lacking Assets Involved in the Insolvency Proceedings

(1) If after the insolvency proceedings have been opened it is found that the assets involved in the insolvency proceedings are insufficient to cover the costs of the proceedings, the insolvency court shall discontinue such proceedings. Discontinuation shall not be ordered if sufficient funds are advanced or if the costs are deferred in accordance with section 4a; section 26 subs. 3 shall apply mutatis mutandis.

(2) The creditors’ assembly, the insolvency administrator and the creditors of the assets involved in the insolvency proceedings shall be heard prior to discontinuation.

(3) Any cash funds available in the assets involved in the insolvency proceedings shall be used by the administrator prior to discontinuation of the proceedings in order to settle the costs of the proceedings, and among such costs firstly expenses in proportion to their amounts. The administrator shall no longer be under an obligation to dispose of the assets involved in the insolvency proceedings.

Section 208: Notification of Lacking Assets Involved in the Insolvency Proceedings

(1) If the costs of the insolvency proceedings are covered but the assets involved in the insolvency proceedings are insufficient to settle the other mature obligations incumbent on the assets involved in the insolvency proceedings, the insolvency administrator shall notify the insolvency court of lacking assets involved in the insolvency proceedings. The same shall apply if it is likely that the assets will be insufficient to meet the other existing obligations incumbent on the assets involved in the insolvency proceedings on the date of their maturity.

(2) The court shall publish the notification of lacking assets involved in the insolvency proceedings. Such notification shall be served separately on the creditors of the assets involved in the insolvency proceedings.

(3) The duty incumbent on the insolvency administrator to administer and dispose of the assets involved in the insolvency proceedings shall also continue subsequent to the notification of lacking assets.

Section 209: Satisfaction of the Creditors of the Assets Involved in the Insolvency Proceedings

(1) The insolvency administrator shall settle the obligations incumbent on the assets involved in the insolvency proceedings in the following order, and equal-ranking obligations in proportion to the amounts:

1. the costs of the insolvency proceedings;

2. obligations incumbent on the assets involved in the insolvency proceedings which became legally effective after the notification of lacking assets involved in the insolvency proceedings without falling under the costs of the proceedings;

3. the other obligations incumbent on the assets involved in the insolvency proceedings, including lastly the maintenance granted pursuant to sections 100 and 101 subs. 1 third sentence.

(2) The following obligations shall also be deemed obligations incumbent on the assets involved in the insolvency proceedings in the meaning of subs. 1 No. 2

1. under a mutual contract for whose performance the administrator opted subsequent to notifying lacking asset involved in the insolvency proceedings;

2. under a continuing obligation for the period after the first date on which the administrator was entitled to terminate such contract after notifying lacking assets involved in the insolvency proceedings;

3. under a continuing obligation to the extent that the administrator has claimed its consideration to the benefit of the assets involved in the insolvency proceedings after notifying lacking assets involved in the insolvency proceedings.

Section 210: Prohibition of Execution

As soon as the insolvency administrator has notified lacking assets involved in the insolvency proceedings, execution in respect of an obligation incumbent on the assets involved in the insolvency proceedings in the meaning of section 209 subs. 1 No. 3 shall be inadmissible.

Section 211: Discontinuation upon Notification of Lacking Assets Involved in the Insolvency Proceedings

(1) As soon as the insolvency administrator has distributed the assets involved in the insolvency proceedings under section 209, the insolvency court shall discontinue the insolvency proceedings.

(2) The administrator shall render separate account of his activities after the notification of lacking assets involved in the insolvency proceedings.

(3) If objects forming part of the assets involved in the insolvency proceedings are identified after discontinuation of such proceedings the court, at the request of the administrator or of a creditor of the assets involved in the insolvency proceedings, or ex officio, shall order delayed distribution. Sections 203 subs. 3, as well as 204 and 205 shall apply mutatis mutandis.

Section 212: Discontinuation for Subsequent Lack of Grounds to Open Insolvency Proceedings

At the debtor’s request the insolvency proceedings shall be discontinued if it is ensured that he, after such discontinuation, will no longer be subject to (imminent) illiquidity or overindebtedness if the insolvency proceedings were opened due to overindebtedness. Admissibility of such a request shall require the debtor to show to the satisfaction of the court that there is no reason to open insolvency proceedings.

Section 213: Discontinuation with the Creditors’ Consent

(1) At the debtor’s request the insolvency proceedings shall be discontinued if he, after expiry of the filing period, submits declarations of consent on the part of all creditors of the insolvency proceedings who have filed claims. For creditors whose claims are denied by the debtor or by the insolvency administrator, and in the case of creditors with a right to separate satisfaction, the insolvency court shall decide on its own discretion on the requirement for consent to be given by such creditors or a security to be provided to them.

(2) The proceedings may be discontinued at the debtor’s request even prior to expiry of the filing period if no other creditors are known than those whose declarations of consent were submitted by the debtor.

Section 214: Discontinuation Procedure

(1) A request to discontinue insolvency proceedings under sections 212 or 213 shall be published. It shall be deposited with the registry of the court for the parties’ inspection; in the case mentioned at section 213 it shall be accompanied by the creditors’ declarations of consent. The creditors of the insolvency proceedings may object to such a request within one week after publication, either in writing or for the records of the court registry.

(2) Before deciding on the discontinuation of insolvency proceedings the court shall hear the requesting party, the insolvency administrator and the creditors’ committee, if appointed. If a creditor objects to such a request, he shall also be heard by the court.

(3) Prior to discontinuation, the administrator shall settle any claims on the assets involved in the insolvency proceedings which have not been denied and provide a security for claims which have been denied.

Section 215: Publication and Legal Effects of Discontinuation

(1) A decision discontinuing insolvency proceedings under sections 207, 211, 212 or 213 and the reason underlying such discontinuation shall be published. The date when such discontinuation will become effective (section 9 subs. 1 third sentence) shall be brought to the notice of the debtor, the insolvency administrator and the members of the creditors’ committee in advance. Sections 200 subs. 2 second and third sentence shall apply mutatis mutandis.

(2) Upon discontinuation of the insolvency proceedings the right to dispose freely of the assets involved in the insolvency proceedings shall be transferred back to the debtor. Sections 201 and 202 shall apply mutatis mutandis.

Section 216: Appeal

(1) If the insolvency proceedings are discontinued under sections 207, 212 or 213 each creditor may bring an immediate appeal, and also the debtor may bring an immediate appeal if his insolvency proceedings were discontinued under section 207.

(2) If a request is rejected under sections 212 or 213, the debtor may bring an immediate appeal.

Part Six: Insolvency Plan

Chapter One: Establishment of the Plan

Section 217: Policy

Counter to the provisions of this statute, the satisfaction of creditors entitled to separate satisfaction and of the creditors of the insolvency proceedings, the disposition of the assets involved in insolvency proceedings and their distribution to the parties concerned, as well as the debtor’s liability subsequent to termination of the insolvency proceedings, may be settled in an insolvency plan.

Section 218: Submission of the Insolvency Plan

(1) The insolvency administrator and the debtor shall be entitled to submit an insolvency plan to the insolvency court. Submission by the debtor may be connected with a request to open insolvency proceedings. A plan received by the court after the final creditors’ assembly shall not be taken into account.

(2) If the creditors’ assembly has charged the administrator with the establishment of an insolvency plan, the administrator shall submit such plan to the court within a reasonable period of time.

(3) The establishment of the plan by the administrator shall be commented by the creditors’ committee, if appointed, by the works council, by the spokesmen of officers and by the debtor as advisors.

Section 219: Breakdown of the Plan

The insolvency plan shall consist of a declaratory and a constructive part. It shall be accompanied by the attachments mentioned at sections 229 and 230.

Section 220: Declaratory Part

(1) The declaratory part of the insolvency plan shall describe the measures taken or still to be taken after opening the insolvency proceedings in order to create the basis for the envisaged establishment of the rights held by the parties involved.

(2) The declaratory part shall contain all other information on the basis and effects of the plan which are relevant to the decision of the creditors on approval of the plan, and for its confirmation by the court.

Section 221: Constructive Part

The constructive part of the insolvency plan shall determine the transformation of the legal position of the parties involved, by the insolvency plan.

Section 222: Formation of Groups

(1) While determining the rights held by the parties involved in the insolvency plan, groups shall be formed where creditors are concerned with differing legal status. A distinction shall be made between

1. the creditors entitled to separate satisfaction if their rights are encroached upon by the plan;

2. the non-lower ranking creditors;

3. each class of lower-ranking creditors of the insolvency proceedings unless their claims are deemed to be waived pursuant to section 225.

(2) Creditors with equal rights may form groups where creditors with equivalent economic interests are set together. Such groups shall be adequately separated from each other. The criteria of their separation shall be indicated in the plan.

(3) Employees shall form a separate group if they are claiming major amounts as creditors of the insolvency proceedings. Separate groups may be formed for minor creditors.

Section 223: Rights of Creditors Entitled to Separate Satisfaction

(1) If the insolvency plan does not provide otherwise, the plan shall not affect the right of creditors entitled to separate satisfaction to achieve satisfaction from objects subject to rights of separation. Any derogating provision shall be ruled out in respect of securities provided to

1. the participant in a system in accordance with section 96 subs. 2 second or third sentence to safeguard his claims from the system, or

2. the central bank of a Member State of the European Union or the European Central Bank.

(2) If the plan provides otherwise the plan in its constructive part shall, for creditors entitled to separate satisfaction, indicate the fraction by which their rights will be reduced, detail; the period of respite for their claims, or provide for any other provisions binding upon them.

Section 224: Rights of the Creditors of the Insolvency Proceedings

For the non-lower ranking creditors the constructive part of the insolvency plan shall indicate the fraction by which their claims will be reduced, detail the period of respite for their claims, announce the securities for them or provide for any other provisions to which they are to be subjected.

Section 225: Rights of Lower-ranking Creditors of the Insolvency Proceeding

(1) The claims of lower-ranking creditors of the insolvency proceedings shall be deemed waived unless the insolvency plan provides otherwise.

(2) If the insolvency plan provides otherwise, the constructive part, for each group of lower-ranking creditors, shall give the indications required under section 224.

(3) The debtor’s liability for fines and his obligations equal to such penalties under section 39 subs. 1 No. 3 subsequent to termination of the insolvency proceedings can neither be excluded nor limited by a plan.

Section 226: Equal Treatment of Parties Involved

(1) Within each group all parties involved shall be offered equal rights.

(2) Any distinct treatment of the parties forming one group shall require the consent of all parties concerned. In such a case the insolvency plan shall be accompanied by each party’s statement of consent

(3) Any agreement concluded by the insolvency administrator, the debtor or any other person and individual parties. providing for an advantage not envisaged under the plan in consideration of such parties’ conduct in votes or otherwise with respect to the insolvency proceedings shall be void.

Section 227: Debtor’s Liability

(1) If the insolvency plan does not provide otherwise the debtor shall be discharged of his residual obligations held by the creditors of the insolvency proceedings by the satisfaction of such creditors under the constructive part.

(2) If the debtor is a company without legal personality or a partnership limited by shares, subs. 1 shall apply mutatis mutandis to the partners’ personal liability.

Section 228: Modification of conditions under Property Law

If rights in objects are to be created, modified, transferred or waived, any legal declarations necessary from the parties involved may be included in the constructive part of the insolvency plan. If registered rights in real estate or in registered rights are involved, such rights shall be detailed in compliance with section 28 of the Land Register Code. The second sentence shall apply mutatis mutandis to rights registered in the register of ships and the register of ships under construction, or in the register of liens on aircraft.

Section 229: Survey of Assets. Earnings and Finance Plan

If it is envisaged that the creditors will be satisfied from the earnings derived from the debtor’s enterprise continued by the debtor or by a third party the insolvency plan shall be accompanied by a survey of assets listing the values of assets and obligations to be balanced should the plan become effective. In addition, the plan shall indicate the expenses and earnings to be expected during the period of the creditors’ satisfaction, and by which succession of earnings and expenses the liquidity of the enterprise will be maintained during such period.

Section 230: Further Attachments

(1) If the insolvency plan provides for the debtor to continue his enterprise, and if the debtor is an individual, the plan shall be accompanied by the debtor’s statement of willingness to continue the enterprise under the plan. If the debtor is a company without legal personality or a partnership limited by shares, the plan shall be accompanied by a similar statement by the partners with personal liability. The debtor’s statement under the first sentence shall not be required from a debtor submitting the plan himself.

(2) If it is envisaged that creditors will acquire shares, membership rights or interests in a corporation, an unincorporated association or in a company without legal personality, the plan shall be accompanied by the declaration of consent of each such creditor.

(3) If a third party has agreed to enter into obligations to the creditors if the plan is confirmed, the plan shall be accompanied by the statement of such third party.

Section 231: Refusal of the Plan

(1) The insolvency court shall refuse the insolvency plan ex officio

1. if the provisions governing the right to submit a plan and its contents are not complied with, and the submitting party is unable to correct such defect or does not correct it within a reasonable period of time fixed by the court;

2. if a plan submitted by the debtor obviously has no chance of being accepted by the creditors or confirmed by the court, or

3. if the claims provided for the parties under the constructive part of a plan submitted by the debtor obviously cannot be satisfied.

(2) If in the insolvency proceedings the debtor has already submitted a plan which has been refused by the creditors, not confirmed by the court or withdrawn by the debtor after publication of the date of the discussion meeting, the court shall refuse a new plan by the debtor if such refusal is requested by the insolvency administrator with the consent of the creditors’ committee, if appointed.

(3) The submitting party may bring an immediate appeal against the order refusing the plan.

Section 232: Comments on the Plan

(1) If the insolvency plan is not refused, the insolvency court shall forward it to the following for their comments:

1. the creditors’ committee, if appointed, the works council and the spokesmen of officers;

2. the debtor if the insolvency administrator submitted the plan, and

3. the administrator if the debtor submitted the plan.

(2) The court may also give an opportunity to the official representative body of industry, trade, the craft or of agriculture competent for the debtor or to other expert organisations to express their views.

(3) The court shall set the deadline for submission of the comments.

Section 233: Suspension of Disposition and Distribution

To the extent to which continued disposition and distribution of the assets involved in the insolvency proceedings would impair the implementation of an insolvency plan which has been submitted, the insolvency court at the request of debtor or the insolvency administrator shall order suspension of disposition and distribution. The court shall overrule or stop such suspension if it entails the risk of considerable disadvantage to the assets involved in the insolvency proceedings or if the administrator with the consent of the creditors’ committee or assembly requests continuation of disposition and distribution.

Section 234: Laying Out of the Plan

The insolvency plan with its attachments and any comments received shall be laid out for the parties’ inspection in the registry of the court.

Chapter Two: Acceptance and Confirmation of the Plan

Section 235: Discussion and Voting Meeting

(1) The insolvency court shall docket a meeting to discuss the insolvency plan and the voting rights of the creditors and subsequently to vote on the plan (discussion and voting meeting). Such meeting shall not be docketed later than one month.

(2) The date of the discussion and voting meeting shall be published. Publication shall indicate the availability of the plan and of any comments received for inspection in the registry of the court. Section 74 subs. 2 second sentence shall apply mutatis mutandis.

(3) Creditors of the insolvency proceedings who have filed claims, creditors entitled to separate satisfaction, the insolvency administrator, the debtor, the works council and the spokesmen of officers shall receive individual summons. A copy of the plan, to be provided at the request of the submitting party, or a summary of its essential contents, shall be sent with the summons.

Section 236: Coincidence with the Verification Meeting

The discussion and voting meeting may not be docketed prior to the verification meeting. Both meetings, however, may be docketed to coincide.

Section 237: Voting Right of the Creditors of the Insolvency Proceedings

(1) Section 77 subs. 1 first sentence, as well as subs. 2 and 3 No. 1, shall apply mutatis mutandis to the voting right of the creditors of the insolvency proceedings while voting on the insolvency plan. Creditors entitled to separate satisfaction may only vote as creditors of the insolvency proceedings if the debtor is personally liable to them and if they waive their right to separate satisfaction or are not satisfied under such right; as long as their non-satisfaction has not been determined, they shall be taken into account with the probable value of their non-satisfaction.

(2) Creditors whose claims are not impaired by the plan shall have no voting right.

Section 238: Voting Right of Creditors Entitled to Separate Satisfaction

(1) If the legal status of creditors entitled to separate satisfaction is covered in the insolvency plan, the rights of such individual creditors shall be discussed at the meeting. A voting right shall be vested in rights to separate satisfaction denied by neither the insolvency administrator, the creditors entitled to separate satisfaction nor the creditors of the insolvency proceedings. Sections 41 and 77 subs. 2, as well as 3 No. 1 shall apply mutatis mutandis to the voting right of denied, suspended or immature rights.

(2) Section 237 subs. 2 shall apply mutatis mutandis.

Section 239: Voting List

The registrar of the court registry shall record in a list the voting rights of creditors resulting from the meeting.

Section 240: Modification of the Plan

The submitting party shall be entitled to modify the contents of individual provisions of the insolvency plan in accordance with the results of the discussion meeting. A vote may be taken at the same meeting on the modified plan.

Section 241: Separate Voting Meeting

(1) The insolvency court may docket a separate meeting for the vote on the insolvency plan. In this case, the period of time between the discussion meeting and the voting meeting shall not extend beyond one month.

(2) The creditors with voting rights and the debtor shall be summoned to the voting meeting. If the plan has been modified, such modification shall be specifically indicated.

Section 242: Voting in Writing

(1) If a separate voting meeting is docketed, the voting right may be exercised in writing.

(2) The insolvency court shall send the voting slip to the creditors with voting rights after the discussion meeting while informing them of their voting right. Voting in writing shall not be counted unless received by the court not later than one day prior to the voting meeting; this shall be referred to when the voting slip is forwarded.

Section 243: Voting by Groups

Each group of creditors with voting rights shall vote on the insolvency plan separately.

Section 244: Necessary Majorities

(1) Acceptance of the insolvency plan by the creditors shall require that, in each group,

1. the majority of creditors with voting rights backs the plan, and

2. the sum of claims held by creditors backing the plan exceeds half of the sum of claims held by the creditors with voting rights.

(2) Creditors who hold a right jointly or whose rights constituted a uniform right until the reason to open insolvency proceedings came into effect shall be counted as one creditor in the vote. The same shall apply if a right is the object of a pledge or a usufruct.

Section 245: Prohibition to Obstruct

(1) Even if the necessary majorities have not been achieved, a voting group shall be deemed to have consented if

1. the creditors forming such group presumably suffer no loss by the insolvency plan compared with their situation without such plan,

2. the creditors forming such group participate to a reasonable extent in the economic value devolving on the parties under the plan, and

3. the majority of the voting groups have backed the plan with the necessary majorities.

(2) A reasonable participation of the creditors forming a group for the purpose of subs. 1 No. 2 shall exist if under the plan

1. no other creditor will receive economic values exceeding the full amount of his claim;

2. neither a creditor with a lower-ranking claim to satisfaction without a plan, compared with the creditors forming his group, nor the debtor nor a person holding the debtor’s shares receives an economic value, and

3. no creditor to be satisfied on an equal footing with the creditors forming his group without a plan receives an advantage with respect to such creditors.

Section 246: Consent of Lower-ranking Creditors of the Insolvency Proceeding

The following supplemental provisions shall apply to acceptance of the insolvency plan by the lower-ranking creditors of the insolvency proceedings:

1. The groups ranking as mentioned at section 39 subs. 1 No. 1 or 2 shall be deemed to have given their consent if the relevant claims to interest or costs are waived under the plan or are deemed to be waived under section 225 subs. 1, and if even the main claims of the creditors of the insolvency proceedings in respect of their principal amounts cannot be satisfied to the full under the plan.

2. The consent of the groups ranking behind section 39 subs. 1 No. 3 shall be deemed to have been given if none of the creditors of the insolvency proceedings receives an advantage under the plan compared with the creditors forming such groups.

3. If none of the creditors forming a group votes at all, the consent of this group shall be deemed to have been given.

Section 247: Debtor’s Consent

(1) The debtor’s consent to the plan shall be deemed to have been given if he does not oppose the plan in writing or for the records of the registry of the court at the latest in the voting meeting.

(2) An opposing opinion under subs. 1 shall be deemed to be irrelevant if

1. the debtor is presumably not placed at a disadvantage by the plan compared with his situation without a plan, and

2. no creditor receives an economic value exceeding the full amount of his claim.

Section 248: Confirmation by the Court

(1) After acceptance of the insolvency plan by the creditors (sections 244 to 246) and after obtaining the debtor’s consent the plan shall require confirmation by the insolvency court.

(2) Before the court takes its decision confirming the plan it shall hear the insolvency administrator, the creditors’ committee, if appointed, and the debtor.

Section 249: Conditioned Plan

If the insolvency plan provides for the performance of specific contributions or for the implementation of other measures before confirmation the plan may not be confirmed unless such conditions are met. Confirmation shall be refused ex officio if such conditions are not met even after expiry of an adequate period of time fixed by the insolvency court.

Section 250: Contravention of Procedural Provisions

Confirmation shall be refused ex officio if

1. the provisions governing the contents and the procedural handling of the insolvency plan, as well as its acceptance by the consent of the creditors and of the debtor, were not complied with regarding an essential aspect and such defect cannot be corrected, or

2. acceptance of the plan has been effected by improper means, in particular by an advantage favouring one creditor.

Section 251: Protection of Minorities

(1) At the request of a creditor, confirmation of the insolvency plan shall be refused if the creditor

1. opposed the plan in writing or for the records of the registry of the court at the latest in the voting meeting, and

2. is presumably placed at a disadvantage by the plan compared with his situation without a plan.

(2) Such request shall be admissible only if the creditor shows to the satisfaction of the court that he is placed at a disadvantage under the plan.

Section 252: Publication of Decision

(1) The order confirming the insolvency plan or refusing its confirmation shall be announced at the voting meeting or at a special meeting to be docketed as soon as possible. Section 74 subs. 2 second sentence shall apply mutatis mutandis.

(2) If the plan is confirmed, a copy of the plan or a summary of its essential contents shall be communicated to those creditors of the insolvency proceedings who have filed claims and to creditors entitled to separate satisfaction with reference to its confirmation.

Section 253: Appeal

The creditors and the debtor may bring an immediate appeal against the order confirming the insolvency plan or refusing its confirmation.

Chapter Three: Effects of the Confirmed Plan. Surveillance of Implementation of the Plan

Section 254: General Effects of the Plan

(1) As soon as the order confirming the insolvency plan becomes final its effects under the constructive part shall become binding upon all the parties involved. If the constructive part is to create, modify, transfer or waive rights in objects or if shares in a company with limited liability are to be transferred, the declarations of intent on the part of the parties involved which are included in the plan shall be deemed to have been given in the form required by law. The same shall apply to the undertakings included in the plan on which the creation, modification, transfer or waiving of rights in objects or transfer of shares is based. The first and second sentences shall also apply to creditors of the insolvency proceedings who have not filed their claims, and to parties opposing the plan.

(2) The plan shall leave unaffected the rights entitling the creditors of the insolvency proceedings against the debtor’s co-obligors and guarantors as well as the rights of such creditors to objects not forming part of the assets involved in the insolvency proceedings or deriving from a priority notice covering such objects. The debtor, however, shall be discharged by the plan of his co-obligor’s, guarantor’s or any other redressing party’s claims against himself in the same way as he is discharged of the claims of the creditors of the insolvency proceedings.

(3) If a creditor has received better satisfaction than warranted under the plan, he shall not be held liable to restitution.

Section 255: Proviso of Revival

(1) If the claims held by creditors of the insolvency proceedings were suspended or partly waived on the basis of the constructive part of the insolvency plan such suspension or waiver shall be no longer binding upon a creditor on whose claims the debtor defaults to a considerable extent in performance of the plan. Such default to a considerable extent shall be construed only if the debtor has not paid a mature debt although reminded by the creditor in writing with a period of grace of at least two weeks.

(2) If new insolvency proceedings are opened for the debtor’s assets before the plan has been performed to the full, a suspension or waiver shall be no longer binding upon any of the creditors of the insolvency proceedings.

(3) The plan may provide otherwise. However, the plan may not derogate from subs. 1 to the detriment of the debtor.

Section 256: Denied Claims. Remaining claims

(1) If a claim has been denied at the verification meeting or if the amount of the remaining claim held by a creditor entitled to separate satisfaction has not yet been determined, default on performing the insolvency plan for the purpose of section 255 subs. 1 shall not be construed if the debtor takes into account the claim until final determination of its amount to the extent corresponding to the decision of the insolvency court on the voting right of such creditor upon the vote on the plan. If the court has not decided on the voting right, at the request of the debtor or of the creditor it shall subsequently determine the extent to which the debtor has to provisionally take such claim into account.

(2) If such final determination shows the debtor falling short in his payments he shall pay the arrears. Default to a considerable extent in performance of the plan shall be construed only if the debtor omits to pay the arrears although reminded by the creditor in writing with a period of grace of at least two weeks.

(3) If such final determination shows the debtor overpaying he may claim restitution of the overpaid amount only to the extent exceeding even the immature item of the claim of the creditor under the insolvency plan.

Section 257: Execution under the Plan

(1) Creditors of the insolvency proceedings with determined claims which were not denied by the debtor at the verification meeting may execute under a confirmed and final insolvency plan in connection with entry in the schedule against the debtor as under a judgment declared executable. A claim in respect of which an objection has been raised and overruled shall be deemed equivalent to a claim which has not been denied. Section 202 shall apply mutatis mutandis.

(2) The same shall apply to execution against a third party which, by a written statement submitted to the insolvency court without reserving the beneficium excussionis, have undertaken responsibility together with the debtor for performance of the plan by the latter.

(3) If a creditor invokes his rights in the case of considerable default on the part of the debtor in respect of performance of the plan, he shall show to the satisfaction of the court the reminder and the expiry of the period of grace, but must prove no other facts constituting the default on the part of the debtor in order to receive an execution clause for such rights and to initiate such execution.

Section 258: Termination of the Insolvency Proceedings

(1) As soon as confirmation of the insolvency plan has become final, the insolvency court shall decide on termination of the insolvency proceedings.

(2) Prior to termination the administrator shall settle those claims on the assets involved in the insolvency proceedings which have not been denied and provide securities for denied claims.

(3) Such decision and the reason for termination shall be published. The debtor, the insolvency administrator and the members of the creditors’ committee shall be informed in advance of the date when termination will become effective (section 9 subs. 1 third sentence). Section 200 subs. 2 second and third sentences shall apply mutatis mutandis.

Section 259: Effects of Termination

(1) The offices of the insolvency administrator and of the members of the creditors’ committee shall expire upon termination of the insolvency proceedings. The right of unhindered disposition of the assets involved in the insolvency proceedings shall be transferred back to the debtor.

(2) The provisions governing surveillance of the implementation of the plan shall remain unaffected.

(3) An action brought in the insolvency proceedings to contest the debtor’s transactions maybe continued by the administrator even after termination of the proceedings if provided for in the constructive part of the plan. In such a case the action will be carried on for the debtor’s account unless the plan provides otherwise.

Section 260: Surveillance of Implementation of the Plan

(1) The constructive part of the insolvency plan may provide for surveillance of implementation of the plan.

(2) In the case of subs. 1, subsequent to termination of the insolvency proceedings the performance of the claims of the creditors under the constructive part against the debtor shall be monitored.

(3) If the constructive part provides for such situation, surveillance shall include performance of the claims of the creditors under the constructive part against corporations or companies without legal personality established after the opening of the insolvency proceedings in order to take over or continue the debtor’s enterprise or plant (takeover company).

Section 261: Tasks and Rights of the Insolvency Administrator

(1) Surveillance shall be incumbent on the insolvency administrator. The offices of the administrator and of the members of the creditors’ committee as well as the supervision of the court shall continue for such purpose. Section 22 subs. 3 shall apply mutatis mutandis.

(2) During the period of surveillance the administrator shall each year report to the creditors’ committee, if appointed, and to the court on the progress and further expectations of performance of the insolvency plan. Such reporting obligation shall leave unaffected the right of the creditors’ committee and of the court to demand specific information or an intermediate report at any time.

Section 262: Obligation to Disclosure incumbent on the Insolvency Administrator

If the insolvency administrator finds that claims monitored for performance are not met or cannot be met he shall disclose such failure to the creditors’ committee and to the insolvency court immediately. If no creditors’ committee has been appointed the administrator shall instead inform all creditors entitled against the debtor or the takeover company under the constructive part of the insolvency plan.

Section 263: Transactions Requiring Consent

The constructive part of the insolvency plan may provide that specific transactions of the debtor or of the takeover company shall require the consent of the insolvency administrator during the period of surveillance in order to become effective. Sections 81 subs. 1 and 82 shall apply mutatis mutandis.

Section 264: Loan Ceiling

(1) The constructive part of the insolvency plan may provide for lower-ranking status for the creditors of the insolvency proceedings compared with creditors with entitlements deriving from loans or other credits entered into by the debtor or the takeover company during the period of surveillance or held open by a creditor of the assets involved in the insolvency proceedings to extend into the period of surveillance. In such a case the maximum amount of such loans shall also be fixed (loan ceiling). It may not exceed the value of property listed in the survey of assets contained in the plan (section 229 first sentence).

(2) The creditors of the insolvency proceedings shall rank lower under subs. 1 only in comparison with creditors entering into an agreement that and to which amount the main claim, interest and costs of the loans granted by them are under the loan ceiling, and receiving confirmation of such agreement in writing from the insolvency administrator.

(3) Section 39 subs. 1 No. 5 shall remain unaffected.

Section 265: Lower-ranking Status of New Creditors

Creditors with other contractual claims created during the period of surveillance shall also have a lower-ranking status in comparison with creditors with entitlements deriving from loans entered into or held open under section 264. Claims created under a continuing obligation prior to surveillance shall also be deemed to constitute such claims for the time after the first date on which the creditor could terminate such contract after surveillance began.

Section 266: Consideration of Lower-ranking Status

(1) Lower-ranking status of the creditors of the insolvency proceedings and of the creditors mentioned at section 265 shall be taken into account only in insolvency proceedings opened before termination of surveillance.

(2) In any such new insolvency proceedings such creditors shall take priority over any other lower-ranking creditors.

Section 267: Publication of Surveillance

(1) If performance of the insolvency plan is to be monitored, this shall be published together with the order terminating the insolvency proceedings.

(2) Publication shall also cover:

1. in the case of section 260 subs. 3 any extension of such surveillance to the takeover company;

2. in the case of section 263 the criteria of transactions requiring the consent of the insolvency administrator;

3. in the case of section 264 the amount of a loan ceiling.

(3) Section 31 shall apply mutatis mutandis. If in the case of section 263 the right to transfer a real estate, a registered ship, a ship under construction or an aircraft, a right in any such object or a right in such a right is subject to’ restriction, sections 32 and 33 shall apply mutatis mutandis.

Section 268: Termination of Surveillance

(1) The insolvency court shall decide on termination of surveillance if

1. the claims monitored for satisfaction have been met or their satisfaction is ensured, or

2. three years have expired since termination of the insolvency proceedings and the opening of new insolvency proceedings has not been requested.

(2) Such decision shall be published. Section 267 subs. 3 shall apply mutatis mutandis.

Section 269: Costs of Surveillance

The cost of surveillance shall be borne by the debtor. In the case of section 260 subs. 3 the takeover company shall bear any costs incurred for its surveillance.

Part Seven: Personal Management

Section 270: Prerequisites

(1) The debtor may manage and dispose of the assets involved in insolvency proceedings under surveillance by a custodian if the insolvency court orders such personal management while deciding on the opening of the insolvency proceedings. Such proceedings shall be subject to the general provisions unless this part provides otherwise.

(2) The order shall require

1. the debtor’s request,

2. if a creditor has requested the opening of insolvency proceedings, the consent of the creditor to the debtor’s request, and

3. that in accordance with the circumstances it is to be expected that the order will not lead to a delay in the proceedings or other disadvantages to the creditors.

(3) In the case of subs. 1, a custodian shall be appointed instead of an insolvency administrator. The claims of the creditors of the insolvency proceedings shall be filed with the custodian. Sections 32 and 33 shall not apply.

Section 271: Subsequent Order

If the debtor’s request for personal management has been refused by the insolvency court, but the debtor’s personal management is requested by the first creditors’ assembly, the court shall order such personal management. The former insolvency administrator may be appointed custodian.

Section 272: Repeal of the Order

(1) The insolvency court shall repeal its decision ordering personal management if requested by

1. the creditors’ assembly;

2. a creditor with a right to separate satisfaction or by a creditor of the insolvency proceedings, and if the prerequisite under section 270 subs. 2 No. 3 has been removed;

3. by the debtor.

(2) A creditor’s request shall be only admissible if he shows the removal of such prerequisite to the satisfaction of the court. Before deciding on the request, the insolvency court shall hear the debtor. The creditor and the debtor may bring an immediate appeal against the decision of the court.

(3) The former custodian may be appointed as insolvency administrator.

Section 273: ublication

The decision of the insolvency court ordering the debtor’s personal management after the opening of insolvency proceedings, or repealing such order, shall be published.

Section 274: Legal Status of the Custodian

(1) Sections 54 No. 2, as well as 56 to 60 and 62 to 65 shall apply mutatis mutandis to the custodian’s appointment, supervision by the insolvency court, as well as to liability and remuneration.

(2) The custodian shall verify the debtor’s economic situation and monitor the management of his business and expenses for his livelihood. Section 22 subs. 3 shall apply mutatis mutandis.

(3) If the custodian finds circumstances suggesting disadvantages to the creditors under the debtor’s continued personal management he shall disclose such circumstances to the creditors’ committee and to the insolvency court immediately. If no creditors’ committee has been appointed the custodian shall instead inform the creditors of the insolvency proceedings who have filed claims, as well as the creditors with a right to separate satisfaction.

Section 275: Consent of the Custodian

(1) No obligations exceeding the range of his ordinary business may be entered into by the debtor without the custodian’s consent. The debtor may even not enter into obligations falling under the range of his ordinary business if the custodian objects to such obligations.

(2) The custodian may require the debtor to allow collection of all payments received only by the custodian and payments to be made by the custodian only.

Section 276: Consent of the Creditors’ Committee

The debtor shall obtain the consent of the creditors’ committee for transactions of particular importance to the insolvency proceedings. Section 160 subs. 1 second sentence, subs. 2., section 161 second sentence and section 164 shall apply mutatis mutandis.

Section 277: Ordering the Requirement of Consent

(1) At the request of the creditors’ assembly the insolvency court shall order the requirement of the custodian’s consent for certain transactions by the debtor to become legally effective. Section 81 subs. 1 and the second and third sentences, as well as section 82, shall apply mutatis mutandis. If the custodian consents to a transaction giving rise to an obligation incumbent on the assets involved in the insolvency proceedings, section 61 shall apply mutatis mutandis.

(2) Such order may also be issued at the request of a creditor with a right to separate satisfaction or of a creditor of the insolvency proceedings if it is urgently necessary in order to prevent disadvantages to the creditors. The admissibility of such a request shall require that the requesting party shows such prerequisite for the order to the satisfaction of the court.

(3) Such order shall be published. Section 31 shall apply mutatis mutandis. If the right to transfer real property, a registered ship, a ship under construction or an aircraft, a right in such an object or a right in such a right is subjected to the requirement of consent, sections 32 and 33 shall apply mutatis mutandis.

Section 278: Funds for the Debtor’s Livelihood

(1) The debtor may draw funds for himself and the family members mentioned in section 100 subs. 2 second sentence from the assets involved in the insolvency proceedings permitting the debtor a modest livelihood with respect to his former living conditions.

(2) If the debtor is not an individual, subs. 1 shall apply mutatis mutandis to the debtor’s partners with personal liability entitled to represent him.

Section 279: Mutual Contracts

The provisions governing the performance of transactions and the cooperation of the works council (sections 103 to 128) shall apply with the proviso that the insolvency administrator be replaced by the debtor. The debtor shall exercise his rights under such provisions with the concurrence of the custodian. The exercise of the rights under sections 120, 122 and 126 shall require the custodian’s consent to become legally effective.

Section 280: Liability. Contest of the Debtor’s Transactions in Insolvency Proceedings

Only the custodian may claim any liability to the credit of the assets involved in the insolvency proceedings under sections 92 to 93 and contest the debtor’s transactions under sections 129 to 147.

Section 281: Notification of Creditors

(1) The debtor shall establish the record of the assets involved in the insolvency proceedings, the record of creditors and the survey of property (sections 151 to 153). The custodian shall verify such records and survey and give a written statement for each as to whether the result of his verification gives rise to objections.

(2) During the report meeting the debtor shall give the report. The custodian shall comment on the report.

(3) Accounting (sections 66 and 155) shall be incumbent on the debtor. Subs. 1 second sentence shall apply mutatis mutandis to the debtor’s final accounts.

Section 282: Disposition of Securities

(1) The insolvency administrator’s right to dispose of objects subject to rights to separate satisfaction shall be vested in the debtor. However, costs for the determination of such objects and of the rights to such objects shall not be charged. Only the costs actually incurred for disposition and the amount of turnover tax may be counted as costs of disposition.

(2) The debtor shall exercise his right to disposition with the concurrence of the custodian.

Section 283: atisfaction of the Creditors of the Insolvency Proceedings

(1) In examining claims, in addition to the creditors of the insolvency proceedings the debtor and the custodian may deny claims which have been filed. A claim denied by a creditor of the insolvency proceedings, by the debtor or by the custodian shall be deemed not determined.

(2) Distributions shall be effected by the debtor. The custodian shall verify each distribution record and give a written statement for each record as to whether the result of his verification gives rise to objections.

Section 284: Insolvency Plan

(1) Any charge on the part of the creditors’ assembly to establish an insolvency plan shall be directed to the custodian or the debtor. If the charge is directed to the debtor, the custodian shall serve as advisor.

(2) Surveillance of implementation of the plan shall be incumbent on the custodian.

Section 285: Lacking Assets Involved in the Insolvency Proceedings

The custodian shall inform the insolvency court of lacking assets involved in the insolvency proceedings.

Part Eight: Discharge of Residual Debt

Section 286: Policy

If the debtor is an individual he shall be discharged under sections 287 to 303 of his obligations not performed by way of the insolvency proceedings and due to the creditors of the insolvency proceedings.

Section 287: Debtor’s Request

(1) Discharge of residual debt shall require a request on the part of the debtor, which should be joined with his request to open the insolvency proceedings. If it is not joined with the latter, it shall be submitted within two weeks of the reference in accordance with section 20 subs. 2.

(2) Such request shall be accompanied by a statement assigning the debtor’s garnishable claims to emoluments due to him under a service relationship or to emoluments replacing them to a trustee to be appointed by the court for a period of six years following opening of the insolvency proceedings. If the debtor had assigned or pledged such claims to a third party already prior to his request he shall indicate such assignment or pledge in his statement.

(3) Agreements excluding, making dependent on a condition, or otherwise restricting the assignment of claims on the part of the debtor to payments resulting from a service relationship or current payments in lieu shall be ineffective insofar as they would obstruct or be detrimental to the declaration of assignment pursuant to subs. 2 first sentence.

Section 288: Right of Proposal

The debtor and the creditors may propose to the insolvency court as trustee an individual suited to the individual case at hand.

Section 289: Decision by the Insolvency Court

(1) At the debtor’s request, the creditors of the insolvency proceedings and the insolvency administrator shall be heard at the final meeting. The insolvency court shall decide by order at the debtor’s request.

(2) Against such an order an immediate appeal shall be available to the debtor and any creditor of the insolvency proceedings requesting refusal of the discharge of residual debt at the final meeting. The insolvency proceedings shall not be terminated before the order has become final. The final order shall be published together with the order terminating the insolvency proceedings.

(3) If the insolvency proceedings are discontinued, discharge of residual debt may only be granted if, after the notification of lacking assets involved in the insolvency proceedings pursuant to section 209, the assets involved in the insolvency proceedings have been distributed and the proceedings are discontinued pursuant to section 211. Subs. 2 shall apply with the proviso that discontinuation shall replace termination of the proceedings.

Section 290: Refusal of Discharge of Residual Debt

(1) The order shall refuse discharge of residual debt if such refusal has been requested by a creditor of the insolvency proceedings at the final meeting and

1. if the debtor has received a final verdict for commission of a criminal offence under sections 283 to 283 c of the Criminal Code;

2. if the debtor by wanton act or gross negligence has given a false or incomplete statement on his economic condition in writing in the last three years prior to the request to open the insolvency proceedings or subsequent to this request in order to obtain a loan or grants from public funds or to avoid making payments to public funds;

3. if the debtor has obtained discharge of residual debt in the last ten years prior to the request to open the insolvency proceedings or subsequent to this request, or if such request has been refused pursuant to section 296 or 297;

4. the debtor by wanton act or gross negligence has impaired the satisfaction of the creditors of the insolvency proceedings in the last year prior to the request to open insolvency proceedings, or subsequent to this request, by entering into inappropriate obligations, by wasting property or by delaying the opening of the insolvency proceedings without any expectancy of an improved economic condition;

5. if the debtor by wanton act or gross negligence has infringed the obligations of disclosure or cooperation under this statute during the insolvency proceedings; or

6. if in the lists of his property, income, creditors and claims against him, which are to be submitted pursuant to section 305 subs. 1 No. 3, the debtor has by wanton act or gross negligence made false or incomplete statements.

(2) A creditor’s request of refusal shall be admissible only if a reason why a discharge of residual debt should be refused is shown to the satisfaction of the court.

Section 291: Notification of Discharge of Residual Debt

(1) Unless any of the conditions mentioned at section 290 exist, the court shall state in its order that the debtor will achieve discharge of his residual debt if he meets his obligations under section 295 and the preconditions for refusal pursuant to sections 297 or 298 do not pertain.

(2) In such same order the court shall appoint the trustee in whom the debtor’s garnishable emoluments will be vested in accordance with the latter’s statement of assignment (Section 287 subs. 2).

Section 292: Legal Status of Trustee

(1) The trustee must bring the assignment to the notice of the person obliged to pay the emoluments, insofar as the costs of the proceedings which have been deferred in accordance with section 4a have been corrected by deducting the cost of appointing counsel. He must keep separate the amounts received under such assignment and any other payments contributed by the debtor or third parties from his own property and distribute them annually to the creditors of the insolvency proceedings as directed by the final record. Section 36 subs. 1 second sentence and subs. 4 shall apply mutatis mutandis. From the sums which he receives from the assignment, as well as from the other payments, he shall pay the debtor on expiry of a period of four years from termination of the insolvency proceedings ten percent, and on expiry of a period of five years from termination, fifteen percent. If the costs of the proceedings deferred in accordance with section 4a have not yet been corrected, money shall only be transferred to the debtor if his income does not exceed the amount calculated in accordance with section 115 subs. 1 of the Code of Civil Procedure.

(2) The creditor’s assembly may also charge the trustee with surveillance of the debtor meeting his obligations. In such a case the trustee shall inform the creditors immediately upon determining an infringement of such obligations. The trustee shall only be obliged to carry out surveillance if the additional payment for this is either covered or advanced.

(3) The trustee shall render account to the insolvency court upon expiry of his office’ Sections 58 and 59 shall apply mutatis mutandis, whilst section 59 shall however apply with the proviso that any creditor of the insolvency proceedings may request dismissal of the insolvency administrator and any creditor of the insolvency proceedings may bring an immediate appeal.

Section 293: Trustee’ s Remuneration

(1) The trustee shall be entitled to remuneration in consideration of his activity and to reimbursement of appropriate expenses. Such remuneration shall take into account the time and scope of the trustee’s activity.

(2) Section 63 subs. 2 and sections 64 and 65 shall apply mutatis mutandis.

Section 294: Equal Treatment of Creditors

(1) Executions for individual creditors of the insolvency proceedings into the debtor’s property shall be prohibited during the period of the latters’ statement of assignment.

(2) Any agreement between the debtor or other persons and individual creditors of the insolvency proceedings providing for the latters’ advantage shall be void.

(3) Against the claim to emoluments covered by the statement of assignment the obligated person may set off only a claim against the debtor qualifying for set-off under Section 114 subs. 2 if the insolvency proceedings were continued.

Section 295: Obligations of the Debtor

(1) During the period of the statement of assignment the debtor shall be obliged to

1. engage in adequate gainful employment or seek such employment and not refuse any reasonable activity;

2. transfer to the trustee half the value of property acquired by him by way of succession or with respect to his future status as heir;

3. inform the insolvency court and the trustee immediately of any change of residence or place of employment, not conceal any emoluments covered by the statement of assignment or any property covered by No. 2. and disclose to the court and the trustee at their request his gainful employment or his efforts to find such employment as well as his emoluments and his property;

4. make payments to satisfy the creditors of the insolvency proceedings only to the trustee, and not provide an individual creditor with an advantage.

(2) If the debtor is self-employed he shall be obliged to satisfy the creditors of the insolvency proceedings by payments to the trustee as if he had entered into an adequate service contract.

Section 296: Contravention of Obligations

(1) At the request of a creditor of the insolvency proceedings the insolvency court shall refuse discharge of residual debt if the debtor contravenes any of his obligations during the period of the statement of assignment and thereby impairs satisfaction of the creditors of the insolvency proceedings; this shall not apply to debtors without faulty conduct. Such request may be filed only within one year of the date when the creditor became aware of the contravention of an obligation. It shall be admissible only if the facts mentioned in the first and second sentences are shown to the satisfaction of the court.

(2) Prior to its decision on the request, the court shall hear the trustee, the debtor and the creditors of the insolvency proceedings. The debtor shall provide information concerning fulfilment of his obligations and at the request of the creditor confirm the correctness of his disclosure by an affidavit. If without a reasonable excuse he does not provide the disclosure or the affidavit within the deadline set for him, or does not appear at a meeting docketed by the court for him to provide the information or the affidavit, although properly summoned and without giving a reasonable excuse, discharge of residual debt shall be refused.

(3) The requesting party and the debtor may bring an immediate appeal against the decision. Refusal of discharge of residual debt shall be published.

Section 297: Insolvency Offences

(1) At the request of a creditor in the insolvency proceedings, the insolvency court shall refuse discharge of residual debt if in the period between the final meeting and termination of the insolvency proceedings, or during the period of the statement of assignment the debtor received a final verdict for commission of a criminal offence under sections 283 to 283c of the Criminal Code.

(2) Section 296 subs. 1 second and third sentences and subs. 3 shall apply mutatis mutandis.

Section 298: Coverage of the Trustee’s Minimum Remuneration

(1) At the trustee’s request the insolvency court shall refuse discharge of residual debt if the amounts received by him for the preceding year of his effort do not cover minimum remuneration and if the debtor does not pay the uncovered amount although the trustee has requested the debtor’s payment in writing within a period of not less than two weeks indicating the possibility that the debtor’s discharge of residual debt may be refused. This shall not apply if the costs of the insolvency proceedings were deferred in accordance with Section 4a.

(2) The debtor shall be heard prior to the decision. The court shall not refuse discharge of residual debt if the debtor at the court’s request pays the uncovered amount to the trustee within two weeks or the amount is deferred in accordance with section 4a.

(3) Section 296 subs. 3 shall apply mutatis mutandis.

Section 299: Expiry before Date

If discharge of residual debt is refused under sections 296, 297 or 298, the period of the statement of assignment, the trustee’s office and any limitation of the creditors’ rights shall expire as soon as the decision of the court becomes final.

Section 300: Decision on Discharge of Residual Debt

(1) If the period of the statement of assignment has expired without expiry before date, the insolvency court shall decide by order on granting a discharge of residual debt, after hearing the creditors of the insolvency proceedings, the trustee and the debtor.

(2) At the request of a creditor of the insolvency proceedings, under the conditions mentioned at section 296 subs. 1, or subs. 2 third sentence, or section 297, or at the trustee’s request, the insolvency court shall refuse discharge of residual debt under the conditions mentioned at section 298.

(3) The order shall be published. Section 9 remaining unaffected, if the residual debt is discharged, excerpts are to be published in the Federal Gazette.

Section 301: Effect of Discharge of Residual Debt

(1) If a discharge of residual debt is granted it shall become binding upon all creditors of the insolvency proceedings. Such binding effect shall also apply to those creditors who have not filed their claims.

(2) The rights of the creditors of the insolvency proceedings against the debtor’s co-obligors and guarantors and their rights deriving from a registered priority notice securing them or from a right entitling them to separate satisfaction in insolvency proceedings shall remain unaffected by discharge of residual debt. The debtor, however, shall be discharged of claims of co-obligors, guarantors or any other redressing party against himself in the same way as he is discharged of the claims of the creditors of the insolvency proceedings.

(3) If a creditor without entitlement to satisfaction under discharge of residual debt is satisfied he shall not be held liable to restitution.

Section 302: Excepted Claims

The grant of discharge of residual debt shall leave unaffected:

1. obligations of the debtor incumbent on him under a tort committed by wanton act, insofar as the creditor had registered the corresponding claim in accordance with section 174 subs. 2, stating this legal reason;

2. the debtor’s fines as well as his obligations equal to such fines under section 39 subs. 1 No. 3;

3. liabilities from interest-free loans granted to the debtor to pay the costs of the insolvency proceedings.

Section 303: Retraction of Discharge of Residual Debt

(1) At the request of a creditor of the insolvency proceedings, the insolvency court shall retract the grant of discharge of residual debt if it is subsequently found that the debtor has infringed one of his obligations by wanton act and thereby impaired the satisfaction of the creditors of the insolvency proceedings to a considerable extent.

(2) Such request of a creditor shall be admissible only if it is filed within one year after the decision on granting discharge of residual debt became final and if the creditor shows to the satisfaction of the court that the prerequisites under subs. 1 exist and that he was not aware of such prerequisites before the decision of the court became final.

(3) The debtor and the trustee shall be heard prior to the decision. The requesting party and the debtor may bring immediate appeal against such decision. The decision retracting discharge of residual debt shall be published.

Part Nine: Consumer Insolvency Proceedings and other Minor Proceedings

Chapter One: Scope of Application

Section 304: Principle

(1) If the debtor is an individual who pursues or has pursued no independent economic activity, the general provisions shall apply to the proceedings insofar as nothing else is provided in this part. If the debtor has pursued independent economic activity, the first sentence shall apply if his assets are comprehensible and no claims exist against him from employment.

(2) The assets shall be comprehensible within the meaning of subs. 1 only if the debtor has fewer than 20 creditors at the time the request is made to open the insolvency proceedings.

Chapter Two: Plan for the Settlement of Debts

Section 305: Debtor’s Request to open Insolvency Proceedings

(1) With the application to be filed, the debtor shall submit the following with the request to open insolvency proceedings (section 311) or immediately subsequent to this request:

1. a certificate issued by a suitable person or agency from which emerges that within the last six months prior to the request to open insolvency proceedings an unsuccessful attempt has been made to settle out of court with the creditors on the basis of a plan; the plan shall be enclosed and the primary reasons for its failure shall be explained; the Länder may determine which persons or agencies are to be regarded as suitable;

2. the request for grant of discharge of residual debt (section 287), or the declaration that discharge of residual debt is not to be applied for;

3. a record of available assets and income (record of assets), a summary of the main content of this record (overview of the assets), a record of the creditors and a record of the claims against the debtor; the records and the overview of the assets shall also include a declaration that their contents are correct and complete;

4. a plan for the settlement of debts; this may contain all provisions which are suited to lead to an appropriate settlement of debts when account is taken of the interests of the creditors, as well as of the debtor’s assets, income and family circumstances; the plan shall include whether and to what extent sureties, pledges and other securities pertaining to the creditors are to be affected by the plan.

(2) The record of claims pursuant to subs. 1 No. 3, may also refer to enclosed statements of claims made by the creditors. At the request of the debtor, the creditors shall be obliged to provide the debtor with a written statement of their claims against him, at their expense, in order to aid him in preparing the record of claims; in particular, they shall state the extent of their claims and their categorisation in main claim, interest and costs. The request on the part of the debtor must include a reference to a request to open insolvency proceedings which has already been filed with a court, or the filing of which is intended in the near future.

(3) If the debtor has not submitted all the declarations and documents specified in subs. 1, the insolvency court shall request him to supply the missing parts immediately. If the debtor does not comply with this request within one month, his request to open insolvency proceedings shall be regarded as having been retracted. In cases falling under section 306 subs. 3 third sentence the period shall be three months.

(4) In the proceedings in accordance with this Chapter, the debtor may be represented before the insolvency court by a suitable person or by a member of an agency recognised as suitable within the meaning of subs. 1 No. 1. Section 157 subs. 1 of the Code of Civil Procedure shall not apply.

(5) In order to simplify the consumer insolvency proceedings, by virtue of a legal ordinance and with the approval of the Bundesrat, the Federal Ministry of Justice shall be entitled to introduce for the persons concerned forms for the certificates, applications, lists and plans to be submitted in accordance with subs. 1 Nos. 1 to 4. Where forms are introduced in accordance with the first sentence the debtor must use them. Different forms may be introduced for proceedings in courts that process the proceedings automatically, and for proceedings in courts that do not process the proceedings automatically.

Section 305a: Failure of Out-of-Court Debt Settlement

An attempt to reach an out-of-court agreement with the creditors regarding settlement of debts shall be considered to have failed if a creditor requests coercive execution after the negotiations regarding out-of-court settlement of debts have been initiated.

Section 306: Suspension of Proceedings

(1) The proceedings relating to the request to open insolvency proceedings shall be suspended until the decision is taken on the plan for the settlement of debts. This period shall not exceed three months. After hearing the debtor, the court shall order the continuation of the proceedings regarding the request to open proceedings if in accordance with his freely-formed conviction the debt settlement plan is likely not to be accepted.

(2) Subs. 1 shall not be a hindrance to the ordering of safeguards. If the proceedings are suspended, the debtor shall submit the number of duplicates of the debt settlement plan and of the record of assets required for service within two weeks of being called on to do so by the court. Section 305 subs. 3 second sentence shall apply mutatis mutandis.

(3) If a creditor requests opening of proceedings, the insolvency court shall give the debtor the opportunity prior to the decision on opening to also file a request. If the debtor files a request, subs. 1 shall also apply to the creditor’s request. In this case, the debtor shall initially attempt to reach an out-of-court agreement in accordance with section 305 subs. 1 No. 1.

Section 307: Service on the Creditors

(1) The insolvency court shall serve on the creditors named by the debtor the plan for the settlement of debts, as well as the overview of assets, and at the same time shall request the creditors to comment on the records specified in section 305 subs. 1 No. 3 and the plan for the settlement of debts within a deadline of one month; the creditors shall be informed that the records have been deposited at the insolvency court for viewing. At the same time, with express reference to the legal consequences of section 308 subs. 3 second sentence, each creditor shall be given the opportunity to examine the information on his claims in the record of claims, which has been deposited for viewing at the insolvency court within the period set in the first sentence and where necessary to make additions. Section 8 subs. 1 second and third sentences and subs. 2 and 3 shall not apply to service pursuant to the first sentence.

(2) If the comment of a creditor pursuant to subs. 1 first sentence does not arrive at the court within the deadline set, this shall be deemed as approval of the plan for the settlement of debts. This must be pointed out in the request for comment.

(3) Once the deadline set according to subs. 1 first sentence has expired, the debtor shall be given the opportunity to amend or make additions to the plan for the settlement of debts within a deadline to be set by the court, if this is necessary on the basis of the comments of one of the creditors or seems sensible in the interest of a mutually agreed settlement of debts. If necessary, the amendments or additions are to be served on the creditors. Subs. 1 first and third sentences and subs. 2 shall apply mutatis mutandis

Section 308: Acceptance of the Plan for the Settlement of Debts

(1) If no creditor has objected to the plan for the settlement of debts, or if agreement is replaced pursuant to section 309, the plan for the settlement of debts shall be deemed to be approved; the insolvency court shall determine this by means of an order. The plan for the settlement of debts shall have the effect of a settlement in the meaning of section 794 subs. 1 No. 1 of the Code of Civil Procedure. The creditors and the debtor shall be served with a copy of the plan for the settlement of debts and of the order mentioned in the first sentence.

(2) The requests to open insolvency proceedings and to grant discharge of residual debt shall be regarded as retracted.

(3) If claims are neither included in the debtor’s record nor subsequently taken into account when the plan for the settlement of debts is prepared, the creditors may demand that the debtor comply with these claims. This shall not apply to the extent that a creditor has not added to the information on his claim in the record of claims deposited for viewing at the insolvency court within the period set, in spite of the fact that the plan for the settlement of debts was sent to him and the claim had come into existence prior to expiry of the deadline; in this respect, the claim shall become void.

Section 309: Replacement of Approval

(1) If the plan for the settlement of debts has been approved by more than half the named creditors, and if the total of the claims of those creditors who have given approval amounts to more than half the claims of the named creditors, at the request of a creditor or of the debtor, the insolvency court shall replace the objections of a creditor to the plan for the settlement of debts with agreement. This shall not apply if

1. the creditor who has raised objections is not taken into account to an appropriate extent in relation to the other creditors, or

2. this creditor is presumably placed at an economic disadvantage by the plan for the settlement of debts in comparison to the implementation of the procedure for opening insolvency proceedings and discharge of residual debt; in cases of doubt, the income, assets and family circumstances of the debtor at the time of the request pursuant to the first sentence shall be taken as the basis during the whole period of the proceedings.

(2) The creditor shall be heard prior to the decision. He must show to the satisfaction of the court the reasons which pursuant to subs. 1 second sentence stand in the way of replacement of his objections by approval. The party making the request and the creditor whose agreement is being replaced may bring immediate appeal. Section 4a subs. 2 shall apply mutatis mutandis.

(3) If the creditor shows to the satisfaction of the court facts giving rise to serious doubts as to whether a claim stated by the debtor exists or comes to an amount which is higher or lower than that stated, and if the outcome of the dispute is decisive in respect of whether the creditor is suitably taken into account in comparison to the other creditors (subs. 1 second sentence No. 1), approval of this creditor may not be replaced.

Section 310: Costs

The creditors shall have no claim on the debtor for defrayal of the costs incurred by them in connection with the plan for the settlement of debts.

Chapter Three: Simplified Insolvency Proceedings

Section 311: Initiation of the Proceedings concerning Opening of the Insolvency Proceedings

If objections are raised to the plan for the settlement of debts which are not replaced by court approval pursuant to section 309, the proceedings concerning opening of insolvency proceedings shall be reopened ex officio.

Section 312: General Procedural Simplifications

(1) Public announcements shall be effected by means of excerpts; section 9 subs. 2 shall not apply. When the insolvency proceedings are opened, in contrast to what applies at section 29, only the verification meeting shall be docketed. If the proceedings are opened at the request of the debtor, the period named in section 88 shall be three months.

(2) If the debtor’s assets can be clearly seen, and the number of creditors or the extent of the obligations is low, the insolvency court may order that the proceedings or individual parts thereof be carried out in writing. It may rescind or amend this order at any time.

(3) The provisions concerning the insolvency plan (sections 217 to 269) and on personal management (sections 270 to 285) shall not apply.

Section 313: Trustee

(1) The duties of the insolvency administrator shall be assumed by the trustee (section 292). In contrast to section 291 subs. 2, the latter shall be nominated when the insolvency proceedings are opened. Sections 56 to 66 shall apply mutatis mutandis.

(2) It is not the trustee who is entitled to contest transactions pursuant to sections 129 to 147 but every creditor of the insolvency proceedings. The costs incurred by the creditor are to be refunded first from the proceeds. The creditors’ assembly may commission the trustee or a creditor to contest. If the creditors’ assembly has commissioned a creditor to contest the transaction, any costs incurred by him shall be refunded out of the assets involved in the insolvency proceedings if they cannot be covered from the proceeds.

(3) The trustee shall not be entitled to dispose of chattels in respect of which there are pledges or other special rights. The creditor shall have the right of disposition. Section 173 < subs. 2 shall apply mutatis mutandis.

Section 314: Simplified Distribution

(1) At the request of the trustee, the insolvency court shall order waiver of disposition of the assets involved in the insolvency proceedings, either in whole or in part. In this case, it shall also instruct the debtor to pay a sum to the trustee within a period set by the court in accordance with the value of the assets which would have had to be distributed to the creditors of the insolvency proceedings. The order shall not be given if disposition of the assets involved in the insolvency proceedings appears to be necessary, particularly in the interest of the creditors.

(2) The creditors of the insolvency proceedings shall be heard prior to the decision.

(3) The decision on a request on the part of the debtor for discharge of residual debt to be granted (sections 289 to 291) shall not be taken until expiry of the deadline set pursuant to subs. 1 second sentence. At the request of one of the creditors of the insolvency proceedings, the court shall refuse to grant discharge of residual debt if the amount payable pursuant to subs. 1 second sentence has not been paid even subsequent to expiry of a further deadline of two weeks set by the court with reference to the possibility of refusing to grant discharge of residual debt. The debtor shall be heard prior to a decision being taken.

Part Ten: Special Types of Insolvency Proceeding

Chapter One: Insolvency Proceedings of a Decedent’s Estate

Section 315: Local Jurisdiction

The insolvency court in whose district a decedent had his usual place of abode shall have exclusive local jurisdiction for the insolvency proceedings to be opened for his estate. If the decedent had the centre of his self-employed business activity in a different place the insolvency court in whose district such place is located shall have exclusive jurisdiction.

Section 316: Admissibility of the Opening of Insolvency Proceedings

(1) The opening of the insolvency proceedings shall not be barred by the fact that the heir has not yet accepted devolution of the estate on himself or that he is subject to unlimited liability for the obligations incumbent on the estate.

(2) If there are several heirs, the insolvency proceedings may also be opened subsequent to division of the estate.

(3) There shall be no insolvency proceedings in respect of a portion of an estate.

Section 317: Persons Entitled to Request the Opening of Proceedings

(1) The opening of the insolvency proceedings relating to a decedent’s estate may be requested by any heir, by the administrator of the estate or by any other guardian. by an executor entitled to manage the estate and by any creditor of the estate.

(2) If the request is not made by all heirs, it shall be admissible if the reason to open the insolvency proceedings is shown to the satisfaction of the court. The insolvency court shall hear the other heirs.

(3) If the administration of the estate is incumbent on an executor, the insolvency court shall hear the executor if the heir has made the request, and the heir, if the executor has made the request, respectively.

Section 318: Entitlement to make a Request for the Joint Marital Property

(1) If the estate forms part of the joint marital property of a community the spouse who is the heir and the other spouse who is not the heir, but who administers the joint marital property alone or together with the other spouse, may request the opening of the insolvency proceedings relating to such estate. The consent of the other spouse shall not be required. The spouses shall retain the right to make a request even if the community is terminated.

(2) If the request is not brought by both spouses, it shall be admissible if a reason to open insolvency proceedings is shown to the satisfaction of the court. The insolvency court shall hear the dissenting spouse.

Section 319: Request Deadline

The request of a creditor of the estate to open the insolvency proceedings shall be not admissible if a period of two years has expired after the heir accepted devolution of the estate on himself.

Section 320: Reasons for Opening

The estate’s illiquidity and overindebtedness shall be reasons to open the insolvency proceedings. If the opening of the insolvency proceedings is requested by the heir, by the administrator of the estate, by a guardian or by an executor, imminent illiquidity shall also be a reason to open the insolvency proceedings.

Section 321: Execution following Succession

Measures of execution against the estate which were effected following succession shall not entitle a creditor to separate satisfaction.

Section 322: Contestable Transactions on the part of the Heir

If the heir has satisfied claims of descendants to a compulsory portion, legacies or bequests prior to the opening of the insolvency proceedings such transaction may be contested in the same manner as a gratuitous benefit granted by the heir.

Section 323: The Heir’s Expenses

The heir may not withhold satisfaction of any obligations incumbent on him because of the expenses which are to be reimbursed to him from the estate in accordance with sections 1978 and 1979 of the Civil Code.

Section 324: Debts incumbent on the Assets Involved in the Insolvency Proceedings

(1) In addition to the debts mentioned at sections 54 and 55 the following debts shall be deemed as debts incumbent on the assets involved in the insolvency proceedings:

1. expenses to be reimbursed to the heir from the estate in accordance with sections 1978 and 1979 of the Civil Code;

2. the costs of the decedent’s funeral;

3. costs incumbent on the estate incurred for the proceedings to have the decedent’s death declared;

4. costs incurred for the disclosure of the decedent’s will, for the estate’s judicial arrestment, for the guardianship of such estate, for the offer to the creditors of the estate to file their claims and for the establishment of an inventory;

5. obligations under transactions made by the estate’s guardian or by an executor;

6. obligations incurred in the management of the estate by its guardian, by an executor or by an heir who has not accepted the devolution of the estate on himself incumbent on the heir to the extent that such obligations would be incumbent on the creditors of the estate upon the designated persons’ management of affairs on their behalf.

(2) In the case of lacking assets involved in the insolvency proceedings the obligations mentioned at subs. 1 shall have the rank specified under section 209 subs. 1 No. 3.

Section 325: Obligations incumbent on the Estate

In insolvency proceedings opened for an estate only the obligations incumbent on the estate may be claimed.

Section 326: The Heirs’ Claims

(1) The heir may claim his rights entitling him against the decedent.

(2) If the heir has performed an obligation incumbent on the estate, and if his performance is not deemed as having been made for the account of the estate under section 1979 of the Civil Code, he shall replace the creditor unless he is subject to unlimited liability to the obligations incumbent on the estate.

(3) If the heir has unlimited liability to an individual creditor, he may claim the creditor’s right if the creditor does not claim it.

Section 327: Lower-ranking Obligations

(1) The following shall be satisfied as obligations ranking below the obligations mentioned at section 39, in the following order, and equal-ranking obligations in proportion to their amount:

1. obligations towards descendants entitled to a compulsory portion;

2. obligations under the legacies and bequests ordered by the decedent in his will;

3. obligations to persons with rights as substitute heirs.

(2) A legacy excluding the legal entitlement of a descendant under section 2307 of the Civil Code shall rank among the legal entitlements of descendants as far as it does not exceed such legal entitlement. If the decedent has ordered in his will the satisfaction of a legacy or bequest prior to another legacy or bequest such legacy or bequest shall prevail.

(3) An obligation whose creditor has been excluded under the proceedings offering the creditors of the estate to file their claims or ranking among the excluded creditors under section 1974 of the Civil Code shall be satisfied only after the obligations mentioned at section 39 and, if it forms part of the obligations under subs. 1, after the obligations with which it would have been identical. In other respects, such restrictions shall not affect the order of claims.

Section 328: Restituted Objects

(1) Any object restituted to the assets involved in the insolvency proceedings due to contest of the transaction made by the decedent or made with respect to him may not be used for satisfaction of the obligations mentioned at section 327 subs. 1.

(2) Any property to be reimbursed to the assets involved in the insolvency proceedings by the heir under sections 1978 to 1980 of the Civil Code may only be claimed by creditors excluded under the proceedings offering the creditors of the estate to file their claims or ranking among the excluded creditors under section 1974 of the Civil Code to the extent to which the heir would be liable to restitution of such property under the provisions governing the restitution of an unjust enrichment.

Section 329: Revisionary Succession

Sections 323, 324 subs. 1 No. 1 and 326 subs. 2 and 3 shall also apply to a limited heir after the revisionary heir has succeeded to the decedent’s estate.

Section 330: Purchase of a Decedent’s Estate

(1) If the heir has sold the decedent’s estate he shall be replaced by the purchaser for the insolvency proceedings.

(2) The heir may request the opening of the insolvency proceedings like a creditor of the decedent’s estate with respect to an obligation incumbent on the decedent’s estate which is incumbent on the purchaser under his contractual relationship with the heir. The heir shall have the same right with respect to another obligation incumbent on the decedent’s estate unless the heir is subject to unlimited liability or administration of the estate was ordered. Sections 323, 324 subs. 1 No. 1 and 326 shall also apply to the heir subsequent to the latter’s sale of the decedent’s estate.

(3) Subs. 1 and 2 shall apply mutatis mutandis to cases where a person has sold an estate acquired by means of a contract, or in some other way obligated himself to sell an estate acquired by him by law or in another way.

Section 331: Simultaneous Insolvency of the Heir

(1) In the insolvency proceedings concerning the property of the heir, if insolvency proceedings have also been opened in respect of the estate or if administration of the estate is ordered, sections 52, 190, 192, 198, and 237 subs. 1 second sentence shall apply mutatis mutandis to creditors to the estate regarding whom the heir has unlimited liability.

(2) The same shall apply if a spouse is the heir and the estate is part of the joint marital property which is administered solely by the other spouse, also in insolvency proceedings relating to the property of the other spouse and, if the joint marital property is administered jointly by the spouses, also in insolvency proceedings relating to the joint marital property and in insolvency proceedings relating to other property of the spouse who is not the heir.

Chapter Two: Insolvency Proceedings relating to the Joint Marital Property of a Continued Community

Section 332: Referral to Insolvency Proceedings opened for an Estate

(1) In the case of continued community, sections 315 to 331 shall apply mutatis mutandis to the insolvency proceedings relating to the joint property.

(2) Only those creditors whose claims existed as obligations on the joint property when continued community was established shall be creditors to the insolvency proceedings.

(3) Descendants with partial entitlement shall not be entitled to request the opening of proceedings. They shall however be heard by the insolvency court in the case of a request to open proceedings.

Chapter Three: Insolvency Proceedings relating to the Jointly Administered Marital Property of a Community

Section 333: Right to file a Request. Grounds for Opening Proceedings

(1) Any creditor who can demand fulfilment of an obligation from the joint property shall be entitled to request the opening of insolvency proceedings in relation to the joint property administered jointly by the spouses.

(2) Any spouse shall also be entitled to file a request. If the request is not filed by both spouses, it shall be admissible if the illiquidity of the joint property is shown to the satisfaction of the court; the insolvency court shall hear the other spouse. If the request is filed by both spouses, imminent illiquidity shall also constitute grounds for opening proceedings.

Section 334: Personal Liability of the Spouses

(1) During the insolvency proceedings, personal liability of the spouses for obligations the fulfilment of which can be demanded from the joint property may be claimed only by the insolvency administrator or custodian.

(2) In the case of an insolvency plan, section 227 subs. 1 shall apply mutatis mutandis to the personal liability of the spouses.

Part Eleven: Entering into Force

Section 335: Referral to Introductory Act

This statute shall enter into force on the day determined by means of the introductory act to the Insolvency Statute.

 

The above translation was published by the Federal Ministry of Justice. Reproduced with kind permission. This HTML edition by Marcin Szala and © 2003 Gerhard Dannemann. The contents of this page may be downloaded and printed out in single copies for individual use only. Making multiple copies without permission is prohibited.

Courts Constitution Acts (Gerichtsverfassungsgesetz, GVG)

In the version published on 9 May 1975 (Federal Law Gazette (Bundesgesetzblatt), Part I, page 1077), as most recently amended by Article 9 subsection (1) of the Act of 30 July 2009 (Federal Law Gazette, Part I, page 2449)

Translation provided by the Federal Ministry for Justice and Kathleen Müller-Rostin and reproduced with kind permission.


Table of Contents

Title I Jurisdiction

Section 1
Section 2 to 9
Section 10
Section 11
Section 12
Section 13
Section 13a
Section 14
Section 15
Section 16
Section 17
Section 17a
Section 17b
Section 18
Section 19
Section 20
Section 21

Title II General provisions concerning the presidium and the allocation of court business

Section 21a
Section 21b
Section 21c
Section 21d
Section 21e
Section 21f
Section 21g
Section 21h
Section 21i
Section 21j

Title III Local courts

Section 22
Section 22a
Section 22b
Section 22c
Section 22d
Section 23
Section 23a
Section 23b
Section 23c
Section 23d
Section 24
Section 25
Section 26
Section 26a
Section 27

Title IV Courts with lay judges

Section 28
Section 29
Section 30
Section 31
Section 32
Section 33
Section 34
Section 35
Section 36
Section 37
Section 38
Section 39
Section 40
Section 41
Section 42
Section 43
Section 44
Section 45
Section 46
Section 47
Section 48
Section 49
Section 50
Section 51
Section 52
Section 53
Section 54
Section 55
Section 56
Section 57
Section 58

Title V Regional courts

Section 59
Section 60
Section 61-69
Section 70
Section 71
Section 72
Section 73
Section 73a
Section 74
Section 74a
Section 74b
Section 74c
Section 74d
Section 74e
Section 74f
Section 75
Section 76
Section 77
Section 78

Title Va Criminal divisions with jurisdiction over execution of sentences

Section 78a
Section 78b

Title VI Criminal divisions with lay judges

Sections 79 to 92

Title VII Commercial divisions

Section 93
Section 94
Section 95
Section 96
Section 97
Section 98
Section 99
Section 100
Section 101
Section 102
Section 103
Section 104
Section 105
Section 106
Section 107
Section 108
Section 109
Section 110
Section 111
Section 112
Section 113
Section 114

Title VIII Higher regional courts

Section 115
Section 115a
Section 116
Section 117
Section 118
Section 119
Section 120
Section 120a
Section 121
Section 122

Title IX Federal Court of Justice

Section 123
Section 124
Section 125
Section 126 to 129
Section 130
Section 131
Section 131a
Section 132
Section 133
Section 134
Section 134a
Section 135
Section 136
Section 137
Section 138
Section 139
Section 140

Title IXa Jurisdiction over proceedings to reopen cases in criminal matters

Section 140a

Title X Public prosecution office

Section 141
Section 142
Section 142a
Section 143
Section 144
Section 145
Section 145a
Section 146
Section 147
Section 148
Section 149
Section 150
Section 151
Section 152

Title XI Court registry

Section 153

Title XII Officials entrusted with service and execution

Section 154
Section 155

Title XIII Mutual judicial assistance

Section 156
Section 157
Section 158
Section 159
Section 160
Section 161
Section 162
Section 163
Section 164
Section 165
Section 166
Section 167
Section 168

Title XIV Publicity and court officers

Section 169
Section 170
Section 171
Section 171a
Section 171b
Section 172
Section 173
Section 174
Section 175
Section 176
Section 177
Section 178
Section 179
Section 180
Section 181
Section 182
Section 183

Title XV Language of the court, communication with the court

Section 184
Section 185
Section 186
Section 187
Section 188
Section 189
Section 190
Section 191
Section 191a

Title XVI Deliberations and voting

Section 192
Section 193
Section 194
Section 195
Section 196
Section 197
Section 198

 


Title I

Jurisdiction

Section 1

Judicial power shall be exercised by independent courts that are subject only to the law.

Sections 2-9

(repealed)

Section 10

Under the supervision of a judge, trainee jurists (Referendare) may handle requests for mutual judicial assistance and, except in criminal matters, hear participants in the proceedings, take evidence and conduct the oral hearing. Trainee jurists shall not be authorised to order administration of an oath or to administer an oath.

Section 11

(repealed)

Section 12

Ordinary jurisdiction shall be exercised by local courts (Amtsgerichte), regional courts (Landgerichte), higher regional courts (Oberlandesgerichte) and by the Federal Court of Justice (Bundesgerichtshof, the highest federal court for the area of ordinary jurisdiction).

Section 13

The ordinary courts shall have jurisdiction over the civil disputes, family matters and non-contentious matters (civil matters) as well as criminal matters for which neither the competence of administrative authorities nor the jurisdiction of the administrative courts (Verwaltungsgerichte) has been established and for which no special courts have been created or permitted by provisions of federal law.

Section 13a

Land law may provide that matters of all kinds be assigned either entirely or partially to a single court for the districts of several courts and that external adjudicating bodies of courts be established.

Section 14

Navigation courts (Schifffahrtsgerichte) shall be permitted as special courts for the matters designated in international treaties.

Section 15

(repealed)

Section 16

Extraordinary courts shall not be allowed. No one may be removed from the jurisdiction of his1 lawful judge.

1: Translator’s note: The masculine form is used hereinafter solely in the interest of readability

Section 17

(1) Once an action has been brought before a court, the admissibility of such recourse shall not be affected by any subsequent change in the circumstances upon which it is founded. The matter may not be brought before another court by any party while it is pending.

(2) The court of admissible recourse shall decide the dispute in the light of all relevant legal aspects. Article 14 paragraph (3), fourth sentence, and Article 34, third sentence, of the Basic Law (Grundgesetz) shall remain unaffected.

Section 17a

(1) If a court has declared with final and binding effect that the recourse taken to it is admissible, other courts shall be bound by this decision.

(2) If the recourse taken is inadmissible, the court shall declare this proprio motu after hearing the parties and shall at the same time refer the legal dispute to the competent court of admissible recourse. If several courts are competent, the dispute shall be referred to the court to be selected by the plaintiff or applicant or, if no selection is made, to the court designated by the referring court. The decision shall be binding upon the court to which the dispute has been referred in respect of the admissibility of the recourse.

(3) If the recourse taken is admissible, the court may give a preliminary decision to this effect. It must give a preliminary decision if a party challenges the admissibility of the recourse.

(4) The decision pursuant to subsections (2) and (3) may be given without an oral hearing. Reasons must be given therefor. The immediate complaint (sofortige Beschwerde) shall be available against the decision pursuant to the provisions of the respective applicable code of procedure. The participants shall only be entitled to lodge a complaint against a decision of a higher regional court at the highest federal court if this has been admitted in the decision. The complaint must be admitted if the legal issue concerned is of fundamental importance or if the court deviates from a decision of one of the highest federal courts or from a decision of the Joint Panel of the Highest Federal Courts (Gemeinsamer Senat der obersten Gerichtshöfe des Bundes). The highest federal court shall be bound by the admission of the complaint.

(5) The court that rules on an appellate remedy against a decision by the court seized of the case shall not review whether the recourse taken was admissible.

(6) Subsections (1) to (5) shall apply mutatis mutandis to adjudicating bodies with jurisdiction over civil disputes, family matters and non-contentious matters in relation to each other.

Section 17b

(1) After the decision on referral has become final and absolute, the legal dispute shall be pending at the court designated in the decision upon receipt of the file by that court. The effects of pendency shall continue to exist.

(2) If a dispute is referred to another court, the costs of the proceedings before the first court shall be treated as part of the costs incurred at the court to which the dispute was referred. The plaintiff shall bear the additional costs incurred even if he prevails on the main issue.

(3) Subsection (2), second sentence, shall not apply to family matters and non-contentious matters.

Section 18

The members of the diplomatic missions established in the territory of application of this Act, the members of their families and their private servants shall be exempt from German jurisdiction under the Vienna Convention on Diplomatic Relations of 18 April 1961 (Federal Law Gazette 1964, Part II, pages 957 et seq.). This shall also apply if their sending state is not a party to this Convention; in such case Article 2 of the Act of 6 August 1964 relating to the Vienna Convention on Diplomatic Relations of 18 April 1961 (Federal Law Gazette 1964, Part II, page 957) shall apply mutatis mutandis.

Section 19

(1) The members of the consular posts established in the territory of application of this Act, including the honorary consular officers, shall be exempt from German jurisdiction under the Vienna Convention on Consular Relations of 24 April 1963 (Federal Law Gazette 1969, Part II, pages 1585 et seq.). This shall also apply if their sending state is not a party to this Convention; in such case Article 2 of the Act of 26 August 1969 relating to the Vienna Convention on Consular Relations of 24 April 1963 (Federal Law Gazette 1969, Part II, page 1585) shall apply mutatis mutandis.

(2) Special international agreements concerning the exemption of the persons designated in subsection (1) from German jurisdiction shall remain unaffected.

Section 20

(1) German jurisdiction also shall not apply to representatives of other states and persons accompanying them who are staying in territory of application of this Act at the official invitation of the Federal Republic of Germany.

(2) Moreover, German jurisdiction also shall not apply to persons other than those designated in subsection (1) and in sections 18 and 19 insofar as they are exempt therefrom pursuant to the general rules of international law or on the basis of international agreements or other legislation.

Section 21

Sections 18 to 20 shall not stand in the way of execution of a request for transfer of a person in custody and for mutual judicial assistance communicated by an international criminal court established by a legal instrument that is binding on the Federal Republic of Germany.

 

Title II

General provisions concerning the presidium and the allocation of court business

Section 21a

(1) A presidium shall be established at each court.

(2) The presidium shall be composed of the president or supervising judge acting as chairman and,

  1. at courts with at least eighty permanent judicial posts, ten elected judges,
  2. at courts with at least forty permanent judicial posts, eight elected judges,
  3. at courts with at least twenty permanent judicial posts, six elected judges,
  4. at courts with at least eight permanent judicial posts, four elected judges,
  5. at the other courts, the judges eligible to stand for election pursuant to section 21b subsection (1).

Section 21b

(1) Eligible to vote in elections to the presidium are the judges appointed for life and the judges appointed for a specified term upon whom a judicial office has been conferred at the court as well as the judges on probation who are working at the court, the judges by commission and the judges on secondment for a term of at least three months who are performing judicial duties at the court. Eligible to stand for election to the presidium are the judges appointed for life and the judges appointed for a specified term upon whom a judicial office has been conferred at the court. Neither eligible to vote in elections nor eligible to stand for election are judges who have been seconded to another court for more than three months, who have been on leave for more than three months or who have been seconded to an administrative authority.

(2) Each eligible voter may vote for no more than the prescribed number of judges.

(3) The election shall be direct and secret. The persons receiving the most votes shall be deemed elected. Provision for other election procedures for the election to the presidium may be made by Land law. In such case the Land government shall lay down the necessary rules governing the election procedure in an ordinance; it may transfer the authorisation herefor to the Land agency for the administration of justice. In the case of a tie, a decision shall be taken by drawing lots.

(4) Members shall be elected for four years. Half of the members shall resign every two years. The first members to resign shall be determined by drawing lots.

(5) The election procedure shall be regulated in an ordinance that shall be issued by the Federal Government with the approval of the Bundesrat.

(6) In the event that a law is infringed in the course of the election, the election may be challenged by the judges designated in subsection (1), first sentence. Such challenge shall be decided by a division of the competent higher regional court, in the case of the Federal Court of Justice by a panel of that court. If the challenge is declared to be well founded, an appellate remedy lodged against a court decision may not be based on the assertion that the presidium consequently was not properly composed. Otherwise, the provisions of the Act on Procedure in Family Matters and Non-Contentious Matters shall be applicable to the procedure mutatis mutandis.

Section 21c

(1) In the event that the president or supervising judge is unable to be present, he shall be represented by his deputy (section 21h). If the president or supervising judge is present, his deputy, if he has not himself been elected to the presidium, may attend the meetings of the presidium in an advisory capacity. The elected members of the presidium shall not have deputies.

(2) If an elected member of the presidium leaves the court, is seconded to another court for more than three months, is granted leave for more than three months, is seconded to an administrative authority or becomes a member of the presidium by statute, he shall be replaced by the person who is next in line on the basis of the last election.

Section 21d

(1) The size of the presidium shall be governed by the number of permanent judicial posts at the end of the day six months preceding the day on which the business year begins.

(2) If the number of permanent judicial posts at a court with a presidium pursuant to section 21a subsection (2), numbers 1 to 3, has fallen below the respective specified minimum number, the following number of judges shall be elected at the next election held pursuant to section 21b subsection (4):

  1. four judges at a court with a presidium pursuant to section 21a subsection (2), number 1,
  2. three judges at a court with a presidium pursuant to section 21a subsection (2), number 2,
  3. two judges at a court with a presidium pursuant to section 21a subsection (2), number 3.

In addition to the members resigning from the presidium pursuant to section 21b subsection (4), a further member shall resign who shall be selected by drawing lots.

(3) If the number of permanent judicial posts at a court with a presidium pursuant to section 21a subsection (2), numbers 2 to 4, has risen above the maximum number specified for the previous size of the presidium, the following number of judges shall be elected at the next election held pursuant to section 21b subsection (4):

  1. six judges at a court with a presidium pursuant to section 21a subsection (2), number 2,
  2. five judges at a court with a presidium pursuant to section 21a subsection (2), number 3,
  3. four judges at a court with a presidium pursuant to section 21a subsection (2), number 4.

One of these members, who shall be selected by drawing lots, shall resign from the given presidium at the end of two years.

Section 21e

(1) The presidium shall determine the composition of the adjudicating bodies, appoint the investigating judges, regulate representation and allocate court business. It shall make these arrangements prior to the beginning of the business year for the latters duration. The president shall determine which judicial duties he shall perform. Each judge may belong to several adjudicating bodies.

(2) The judges who are not members of the presidium shall be given an opportunity to be heard prior to the allocation of court business.

(3) The arrangements pursuant to subsection (1) may only be changed in the course of the business year if this becomes necessary due to the excessive or insufficient workload of a judge or adjudicating body or as a result of the transfer or prolonged absence of individual judges. The presiding judges of the adjudicating bodies affected by the change in the allocation of court business shall be given an opportunity to be heard prior to such change.

(4) The presidium may order that a judge or adjudicating body that has been handling a case continue to be responsible for that case following a change in the allocation of court business.

(5) If a judge is to be assigned to another adjudicating body or if his sphere of competence is to be changed, he shall, except in urgent cases, be given an opportunity to be heard beforehand.

(6) If a judge is to be released, either entirely or partially, in order to perform judicial administration functions, the presidium shall be heard beforehand.

(7) The presidium shall decide by a majority vote. Section 21i subsection (2) shall apply mutatis mutandis.

(8) The presidium may rule that judges of the court may be present during the deliberations and votes of the presidium, either for the entire duration or for a part thereof. Section 171b shall apply mutatis mutandis.

(9) The roster allocating court business shall be open for inspection at the registry of the court designated by the president or supervising judge; it need not be published.

Section 21f

(1) The adjudicating bodies at the regional courts, at the higher regional courts and at the Federal Court of Justice shall be presided over by the president and the presiding judges.

(2) In the event that the presiding judge is unable to be present, the member of the adjudicating body designated by the presidium shall preside. In the event that this deputy is also unable to be present, the most senior member or, in a case of equal seniority, the oldest member of the adjudicating body shall preside.

Section 21g

1) Within an adjudicating body composed of several judges, court business shall be allocated among the members by a ruling of all the professional judges belonging to the adjudicating body. In the case of a tie, the presidium shall decide.

(2) The ruling shall specify, prior to the beginning of the business year and for the latters duration, the principles governing the participation of the members in the proceedings; it may only be amended if this becomes necessary due to the excessive or insufficient workload, transfer or prolonged absence of individual members of the adjudicating body.

(3) If, pursuant to the provisions of procedural law, proceedings may be assigned by the adjudicating body to one of its members for decision as a judge sitting alone, subsection (2) shall apply mutatis mutandis.

(4) Where a professional judge is unable to present at the time of the ruling, his place shall be taken by the deputy designated in the roster allocating court business.

(5) Section 21i subsection (2) shall apply mutatis mutandis, provided that the arrangements are made by the presiding judge.

(6) The professional judges affected by the ruling shall be given an opportunity to be heard before it is given.

(7) Section 21e subsection (9) shall apply mutatis mutandis.

Section 21h

The president or supervising judge shall, in respect of the court business assigned to him under this Act that is not to be allocated by the presidium, be represented by his permanent deputy; where there are several permanent deputies, he shall be represented by the most senior deputy or, in a case of equal seniority, by the oldest deputy. Where a permanent deputy has not been designated or is unable to be present, the president or supervising judge shall be represented by the most senior judge or, in a case of equal seniority, by the oldest judge.

Section 21i

(1) A quorum of the presidium shall exist if at least half of its elected members are present.

(2) If a timely decision of the presidium cannot be given, the arrangements specified in section 21e shall be made by the president or by the supervising judge. The reasons for the arrangements shall be stated in writing. The arrangements shall be submitted to the presidium for approval without delay. They shall remain in force as long as the presidium does not rule otherwise.

Section 21j

(1) If a court is established, and if the presidium is to be established pursuant to section 21a subsection (2), numbers 1 to 4, the arrangements specified in section 21e shall be made by the president or by the supervising judge until the presidium is established. Section 21i subsection (2), second to fourth sentences, shall apply mutatis mutandis.

(2) A presidium pursuant to section 21a subsection (2), numbers 1 to 4, shall be established within three months after the establishment of the court. The term specified in section 21b subsection (4), first sentence, shall start at the beginning of the business year following the business year in which the presidium is established if the presidium is not established at the beginning of a business year.

(3) The day on which the court is established shall take the place of the time specified in section 21d subsection (1).

(4) When the electoral board is appointed for the first time, the functions pursuant to section 1 subsection (2), second and third sentences, and section 1 subsection (3) of the Election Regulations for the Presidiums of the Courts of 19 September 1972 (Federal Law Gazette, Part I, page 1821) shall be discharged by the president or by the supervising judge. The end of the time period specified in subsection (2), first sentence, shall be taken as the end of the business year specified in section 1 subsection (2), second sentence, and section 3, first sentence, of the Election Regulations for the Presidiums of the Courts.

Title III

Local courts

Section 22

(1) The local courts (Amtsgerichte) shall be presided over by judges sitting alone.

(2) A judge at a local court may at the same time be conferred an additional judicial office at another local court or at a regional court.

(3) Responsibility for general supervision of service may be transferred by the Land agency for the administration of justice to the president of the superior regional court. If this is not done, and if the local court is staffed with several judges, the Land agency for the administration of justice shall transfer responsibility for general supervision of service to one of them.

(4) Each local court judge shall perform the duties incumbent upon him as a judge sitting alone unless otherwise provided under this Act.

(5) Judges by commission may also be employed. Judges on probation may be employed except as otherwise provided under subsection (6), section 23b subsection (3), second sentence, section 23c subsection (2), or section 29 subsection (1), second sentence.

(6) A judge on probation may not handle insolvency matters during the first year after his appointment.

Section 22a

At local courts with a presidium consisting of all the judges eligible to stand for election (section 21a subsection (2), number 5), the president of the superior regional court or, if the president of another local court is vested with responsibility for supervision of service, that president shall belong to the presidium as chairman.

Section 22b

(1) If a local court is staffed with only one judge, the presidium of the regional court shall designate a judge in its district to serve as the permanent representative of the local court judge.

(2) If it is necessary for a judge at a local court to be temporarily represented by a judge at another court, the presidium of the regional court shall designate a judge in its district to represent the local court judge for no longer than two months.

(3) In urgent cases the president of the regional court may appoint a provisional representative. The grounds for the order must be specified in writing.

(4) In the case of local courts where the president of another local court is responsible for general supervision of service, the presidium of the other local court shall be competent in the cases of subsections (1) and (2) and its president shall be competent in the case of subsection (3).

Section 22c

(1) The Land governments shall be authorised to issue ordinances providing that a joint standby duty schedule be compiled for several local courts in the district of one regional court or that a single local court handle standby duty business, either entirely or partially, if this is advisable in order to ensure a more equitable distribution of standby duty assignments among the judges. The judges of the local courts designated in the first sentence shall be scheduled for standby duty. The ordinance issued pursuant to the first sentence may stipulate that the judges of the regional court also be scheduled for standby duty. Standby duty business shall, pursuant to section 21e, be allocated by the presidium of the regional court in agreement with the presidiums of the local courts concerned. If no agreement can be reached, such allocation shall be made by the presidium of the higher regional court to the district of which the regional court belongs.

(2) The Land governments may transfer the authorisation pursuant to subsection (1) to the Land agencies for the administration of justice.

Section 22d

The validity of an act performed by a judge at a local court shall not be affected by the fact that the act should have been performed by another judge according to the roster allocating court business.

Section 23

The jurisdiction of the local courts in civil disputes shall encompass the following, insofar as they have not been assigned to the regional courts irrespective of the value of the matter in dispute:

  1. disputes concerning claims involving an amount or with a monetary value not exceeding the sum of five thousand euros;
  2. irrespective of the value of the matter in dispute:
    a) disputes concerning claims arising out of a lease of living accommodation or concerning the existence of such a lease; this jurisdiction shall be exclusive;
    b) disputes between travellers and providers of food or lodging, carriers, shippers or passage brokers at ports of embarkation concerning bills for food or lodging, carriage charges, passage monies, carriage of travellers and their belongings and loss of or damage to the latter, as well as disputes between travellers and artisans arising on the occasion of travel;
    c) disputes pursuant to section 43, numbers 1 to 4 and 6 of the Condominium Act; this jurisdiction shall be exclusive;
    d) disputes concerning damage caused by game;
    e) (repealed)
    f) (repealed)
    g) claims arising out of a contract for a life annuity, life endowment or life interest or for vacation of premises that is connected with the transfer of possession of a piece of land.

Section 23a

(1) The local courts shall furthermore have jurisdiction over

  1. family matters;
  2. non-contentious matters, insofar as no other jurisdiction has been established by statutory provisions.

The jurisdiction pursuant to the first sentence, number 1, shall be exclusive.

(2) Non-contentious matters shall be

  1. adult guardianship matters, committal matters and matters relating to adult guardianship appointments;
  2. matters relating to probate and estate division;
  3. register matters;
  4. proceedings under company law pursuant to section 375 of the Act on Procedure in Family Matters and Non-Contentious Matters;
  5. the further non-contentious matters pursuant to section 410 of the Act on Procedure in Family Matters and Non-Contentious Matters;
  6. proceedings in imprisonment matters pursuant to section 415 of the Act on Procedure in Family Matters and Non-Contentious Matters;
  7. proceedings by public notice process;
  8. land register matters;
  9. proceedings under section 1, numbers 1 and 2 to 6, of the Act on Court Procedure in Agricultural Matters;
  10. shipping register matters as well as
  11. other non-contentious matters, insofar as they have been assigned to the courts by federal law.

Section 23b

(1) Divisions for family matters (family courts) shall be established at the local courts.

(2) If several divisions for family matters are established, then all the family matters relating to the same group of persons should be assigned to the same division. If a matrimonial matter becomes pending at one division while another family matter relating to the same group of persons or a common child of both spouses is pending at first instance at another division, the latter matter shall be transferred proprio motu to the division handling the matrimonial matter. If an application in proceedings under sections 10 to 12 of the Act to Implement Certain Legal Instruments in the Field of International Family Law of 26 January 2005 (Federal Law Gazette, Part I, page 162) becomes pending at one division while a family matter relating to the same child is pending at first instance at another division, the latter matter shall be transferred proprio motu to the first-mentioned division; this shall not apply if the application is manifestly inadmissible. Upon concurring application of both parents, the arrangement specified in the third sentence shall also be applied to other family matters in which the parents are involved.

(3) The divisions for family matters shall be composed of family court judges. A judge on probation may not perform the duties of a family court judge during the first year after his appointment.

Section 23c

(1) Divisions for adult guardianship matters, committal matters and matters relating to adult guardianship appointments (adult guardianship courts) shall be established.

(2) The adult guardianship courts (Betreuungsgerichte) shall be composed of adult guardianship court judges. A judge on probation may not perform the duties of an adult guardianship court judge during the first year after his appointment.

Section 23d

The Land governments shall be authorised to issue ordinances assigning to one local court the family matters and, either entirely or partially, the commercial matters and non-contentious matters for the districts of several local courts, insofar as such concentration serves the purpose of material furtherance of the proceedings or appears advisable in order to ensure uniform administration of justice. The Land governments may transfer this authorisation to the Land agencies for the administration of justice.

Section 24

(1) In criminal matters, the local courts shall have jurisdiction unless

  1. the jurisdiction of the regional court is established under section 74 subsection (2) or section 74a or the jurisdiction of the higher regional court is established under section 120,
  2. in an individual case a sentence of imprisonment exceeding four years or committal of the accused to a psychiatric hospital in lieu of or in addition to a penalty or committal of the accused to preventive detention (sections 66 to 66b of the Criminal Code) is to be expected, or
  3. the public prosecution office prefers charges before the regional court due to the particular need for protection of persons aggrieved by the criminal offence who might be considered witnesses or due to the particular scale or the special significance of the case.

(2) The local court may not impose a sentence of imprisonment exceeding four years and may neither order committal to a psychiatric hospital in lieu of or in addition to a penalty nor order committal to preventive detention.

Section 25

A local court judge shall give a decision as a criminal court judge on less serious criminal offences

  1. if they are prosecuted by way of a private prosecution or
  2. if a penalty more severe than a two-year sentence of imprisonment is not to be expected.

Section 26

(1) In the case of criminal offences committed by adults through which a child or a juvenile is injured or directly endangered, and in the case of violations by adults of legal provisions serving the protection or education of young people, the juvenile courts shall also have jurisdiction in addition to the courts with jurisdiction over general criminal matters. Sections 24 and 25 shall apply mutatis mutandis.

(2) In matters relating to the protection of children and juveniles, the public prosecutor should only prefer charges before the juvenile courts if children or juveniles are required as witnesses in the proceedings or if a hearing before the juvenile court appears expedient for other reasons.

Section 26a

(repealed)

Section 27

The jurisdiction and scope of duties of the local courts shall otherwise be determined by the provisions of this Act and the provisions of the procedural codes.

Title IV

Courts with lay judges

Section 28

Courts with lay judges (Schöffengerichte) shall be established at the local courts to hear and decide criminal matters falling under the jurisdiction of the local courts, insofar as such matters are not decided by a criminal court judge.

Section 29

(1) The benchshall consist of a local court judge as presiding judge and two lay judges. A judge on probation may not serve as presiding judge during the first year after his appointment.

(2) Upon application by the public prosecution office, it may be decided at the opening of the main proceedings that a second local court judge be added to the bench (extended bench) if his participation appears necessary in the light of the scale of the matter. An application by the public prosecution office shall not be required if a court of higher rank opens the main proceedings before a court with lay judges.

Section 30

(1) Except where the law provides for exceptions, during the main hearing the lay judges shall exercise judicial office in full and with the same voting rights as the local court judges and shall also participate in the decisions to be made in the course of a main hearing that are entirely unrelated to the delivery of the judgment and may be made without an oral hearing.

(2) The necessary decisions to be made outside the main hearing shall be made by the local court judge.

Section 31

The office of lay judge is an honorary position. It may only be held by Germans.

Section 32

The following persons shall be ineligible for the office of lay judge:

  1. persons who as a result of a judicial decision do not have the capacity to hold public office or who have been sentenced to imprisonment exceeding six months for an intentional act;
  2. persons against whom investigation proceedings are pending for an offence that can result in loss of capacity to hold public office.
  3. (repealed)

Section 33

The following persons should not be appointed to the office of lay judge:

  1. persons who would not yet have attained the age of twenty-five by the beginning of the term of office;
  2. persons who have attained the age of seventy or would have attained the age of seventy by the beginning of the term of office;
  3. persons who are not residing in the municipality at the time the list of nominees is compiled;
  4. persons who are unsuitable candidates for health reasons;
  5. persons who are no longer able to freely dispose over their assets.

Section 34

(1) The following also should not be appointed to the office of lay judge:

  1. the Federal President;
  2. the members of the Federal Government or of a Land government;
  3. civil servants who could be suspended or provisionally retired at any time;
  4. judges, officials of the public prosecution office, notaries and attorneys-at-law;
  5. court bailiffs, police officers and prison staff as well as full-time probation officers and staff of the court assistance agency;
  6. ministers of religion and members of religious associations that by their rules are committed to the common life;
  7. persons who have served as honorary judges in the criminal justice system for two successive terms of office, of which the last term of office is still ongoing at the time the list of nominees is compiled.

(2) In addition to the officials designated hereinbefore, Land legislation may designate higher administrative officials who should not be appointed to the office of lay judge.

Section 35

The following may decline appointment to the office of lay judge:

  1. members of the Bundestag, the Bundesrat, the European Parliament, a Land parliament or a second chamber;
  2. persons who during the previous term of office discharged the obligation to serve as an honorary judge in the criminal justice system on forty days as well as persons who are already serving as honorary judges;
  3. doctors, dentists, nurses, paediatric nurses, orderlies and midwives;
  4. heads of pharmacies that do not employ any other pharmacists;
  5. persons who can credibly demonstrate that their immediate obligation to personally care for their families would make it particularly difficult for them to perform the duties of the office;
  6. persons who have attained the age of sixty-five or would have attained the age of sixty-five by the end of the term of office;
  7. persons who can credibly demonstrate that performing the duties of the office would constitute a particular hardship either for them or for a third party because it would jeopardise or considerably impair an adequate livelihood.

Section 36

(1) The municipality shall compile a list of prospective lay judges every five years. Inclusion in the list shall require the approval of two thirds of the members of the municipal assembly who are present, but at least, however, half of the statutory number of members of the municipal assembly. The respective rules for the adoption of resolutions by the municipal assembly shall remain unaffected.

(2) The list of nominees should adequately reflect all groups within the population in terms of sex, age, occupation and social status. It must contain the names at birth, surnames, first names, date and place of birth, residential address and occupation of the persons nominated.

(3) The list of nominees shall be open to public inspection in the municipality for one week. The time at which it will be laid out for inspection shall be publicly announced in advance.

(4) The lists of nominees for the district of the local court shall contain at least twice as many names as the required number of principal lay judges and alternate lay judges specified in section 43. Their allocation among the municipalities of the district shall be undertaken by the president of the regional court (president of the local court) in keeping with the populations of the municipalities.

Section 37

Objections to the list of nominees may be lodged within one week, calculated from the end of the period of public inspection, either in writing or for the record on the grounds that persons have been included in the list of nominees who are ineligible for inclusion pursuant to section 32 or should not have been included pursuant to sections 33 and 34.

Section 38

(1) The chairman of the municipal council shall send the list of nominees and the objections to the judge at the local court of the district.

(2) If corrections to the list of nominees become necessary after it has been sent, the chairman of the municipal council must notify the judge at the local court accordingly.

Section 39

The judge at the local court shall consolidate the municipalities lists of nominees into a district list and shall prepare the ruling on the objections. He must verify that the provisions of section 36 subsection (3) have been observed and ensure that any defects are remedied.

Section 40

(1) A committee shall convene at the local court every five years.

(2) The committee shall be composed of the judge at the local court as chairman, an administrative official to be designated by the Land government and seven upstanding individuals as associate members. The Land governments shall be authorised to issue ordinances regulating the competence for designation of the administrative official in derogation from the first sentence. They may issue ordinances transferring this authorisation to the highest Land authorities.

(3) The associate members shall be elected from among the inhabitants of the district of the local court by the representative body of the corresponding administrative subdivision by a two-thirds majority of the members present, but at least, however, by half of the statutory number of members. The respective rules for the adoption of resolutions by this representative body shall remain unaffected. If the district of the local court encompasses several administrative districts or parts of several administrative districts, the competent highest Land authority shall determine the number of associate members to be elected by the representative bodies of these administrative districts.

(4) A quorum of the committee shall exist if at least the chairman, the administrative official and three associate members are present.

Section 41

The committee shall rule on the objections to the list of nominees by a simple majority vote. In the case of a tie, the chairman shall have the casting vote. The decisions shall be placed on record. They shall not be contestable.

Section 42

(1) From the corrected list of nominees, the committee shall, by a two-thirds majority vote, select the following for the next five business years:

  1. the necessary number of lay judges;
  2. the necessary number of persons to take the place of any lay judges who become unavailable or to serve as lay judges in the cases of sections 46 and 47 (alternate lay judges). Persons should be selected who reside at the seat of the local court or in the immediate vicinity.

(2) Care should be taken at the time of selection to ensure that all groups within the population are adequately represented in terms of sex, age, occupation and social status.

Section 43

(1) The number of principal lay judges and alternate lay judges required for each local court shall be determined by the president of the regional court (president of the local court).

(2) The number of principal lay judges should be calculated in such a way that each one is likely to be called to serve on no more than twelve ordinary sitting days per year.

Section 44

The names of the selected principal lay judges and alternate lay judges shall be entered in separate lists (Schöffenlisten) at each local court.

Section 45

(1) The dates of the ordinary sittings of a court with lay judges shall be set in advance for the entire year.

(2) The order in which the principal lay judges are to participate in the years individual ordinary sittings shall be decided by drawing lots in a public sitting of the local court. If several benches with lay judges have been established at a local court, lots may be drawn in such a way that each principal lay judge only participates in the sittings of one bench. Lots are to be drawn in such a way that each principal lay judge selected is called to serve on twelve sitting days if possible. The first sentence shall apply mutatis mutandis to the order in which the alternate lay judges shall take the place of lay judges who become unavailable (list of alternate lay judges); the second sentence shall not apply to alternate lay judges.

(3) Lots shall be drawn by the judge at the local court.

(4) The lists of lay judges shall be maintained by a designated registry clerk of the court registry (Schöffengeschäftsstelle). He shall record the drawing of lots. The judge at the local court shall inform the lay judges of the results of the drawing. At the same time, the principal lay judges shall be informed of the sitting days on which they must serve and advised of the legal consequences of failure to appear. A lay judge who is not called to serve on a sitting day until after the commencement of the business year shall be informed and advised in the same manner once he is called.

Section 46

If an additional bench with lay judges is established at a local court during the business year, the number of principal lay judges required for its ordinary sittings shall be drawn by lots from the list of alternate lay judges pursuant to section 45 subsection (1), subsection (2), first sentence, and subsections (3) and (4). The lay judges selected in this manner shall be deleted from the list of alternate lay judges.

Section 47

If court business necessitates the scheduling of extraordinary sittings or if it becomes necessary for lay judges other than the ones initially appointed or for additional lay judges to be called to serve at individual sittings, they shall be selected from the list of alternate lay judges.

Section 48

(1) Additional lay judges (section 192 subsections (2) and (3)) shall be assigned from the list of alternate lay judges.

(2) In the event that a principal lay judge is unable to be present, the additional lay judge initially assigned from the list shall even then take his place if the unavailability of the principal lay judge becomes known prior to the beginning of the sitting.

Section 49

(1) If it becomes necessary for alternate lay judges to be called to serve at individual sittings (section 47 and section 48 subsection (1)), they shall be assigned from the list of alternate lay judges in the order in which they appear on the list.

(2) If a principal lay judge is deleted from the list of lay judges, he shall be replaced by the alternate lay judge who is next in line on the list of alternate lay judges; the name of the replacement shall then be deleted from the list of alternate lay judges. The designated registry clerk of the court registry shall thereupon inform and advise the new principal lay judge in accordance with section 45 subsection (4), third and fourth sentences.

(3) The order in which alternate lay judges are called shall be determined by the date of receipt by the designated registry clerk of the order or ruling indicating the necessity of calling alternate lay judges. The designated registry clerk shall make a note of the date and time of receipt on the order or ruling. Proceeding in the order of receipt, he shall assign the alternate lay judges to the various sittings in accordance with subsection (1) or transfer them to the list of principal lay judges in accordance with subsection (2). In the event that several orders or rulings are received simultaneously, he shall first transfer names from the list of alternate lay judges to the list of principal lay judges in accordance with subsection (2) in alphabetical order of the surnames of the principal lay judges deleted from the list of lay judges; in all other cases the alphabetical order of the surnames of the primary defendants shall be decisive.

(4) If an alternate lay judge is assigned to a sitting day, he shall not be called again until all the other alternate lay judges have likewise been assigned or released from their service commitment or deemed unreachable (section 54). This shall also be the case even if he himself has been released from his service commitment or deemed unreachable.

Section 50

If a sitting extends beyond the time for which the lay judge was initially called, he must continue to serve until the end of the sitting.

Section 51

(repealed)

Section 52

(1) A lay judge shall be deleted from the list of lay judges if

  1. he becomes ineligible for the office of lay judge or if such ineligibility becomes known, or
  2. circumstances arise or become known that are such that he should not be appointed to the office of lay judge.

In the cases of section 33, number 3, however, this shall only apply if the lay judge gives up his residence in the district of the regional court.

(2) Upon his application, a lay judge shall be deleted from the list of lay judges if he

  1. gives up his residence in the district of the local court in which he is serving, or
  2. has participated in sittings on more than 24 sitting days during one business year.

In the case of principal lay judges, such deletion shall only become effective for the sittings that begin more than two weeks after the day on which the application is received by the designated registry clerk of the court registry. If an alternate lay judge has already been notified that he has been called to serve on a specific sitting day, his deletion from the list shall not become effective until after the conclusion of the main hearing begun on that sitting day.

(3) If the lay judge has died or moved out of the district of the regional court, the judge at the local court shall order his deletion from the list. He shall otherwise rule on the application after hearing the public prosecution office and the lay judge concerned.

(4) The decision shall not be contestable.

(5) If an alternate lay judge is transferred to the list of principal lay judges, he shall first fulfil the service commitments for which he was previously called as an alternate lay judge.

(6) If the number of alternate lay judges on the list of alternate lay judges has declined to half the original number, additional lay judges shall be selected from the existing lists of nominees by the committee that was responsible for selecting the original lay judges. The judge at the local court may dispense with selecting additional lay judges if such selection would have to take place during the last six months of the period for which the lay judges have been selected. The order of succession of the new alternate lay judges shall be determined by section 45 mutatis mutandis with the proviso that the places on the list of lay judges to be filled by drawing lots shall follow the last name on the list of lay judges at the time of the drawing.

Section 53

(1) Grounds for refusing service shall only be considered if they are put forward by the lay judge concerned within one week of the time he was informed of his assignment. If such grounds arise or become known at a later date, the time limit shall be calculated from that point onward.

(2) The judge at the local court shall rule on the request after hearing the public prosecution office. The decision shall not be contestable.

Section 54

(1) The judge at the local court may release a lay judge from his service commitment on specific sitting days upon the latters application due to obstacles that have arisen. An obstacle shall be deemed to have arisen if the lay judge is prevented from serving by circumstances that are beyond his control or if it would be unreasonable to expect him to serve.

(2) For the purposes of calling alternate lay judges, it shall be deemed equivalent to being prevented from serving if a lay judge cannot be reached. A lay judge who does not appear at a sitting and whose appearance probably cannot be effected without considerably delaying commencement of the sitting shall be deemed unreachable. An alternate lay judge shall also then be considered unreachable if calling him would necessitate a postponement of the hearing or a considerable delay in its commencement. The decision as to whether a lay judge is unreachable shall be made by the judge at the local court. Section 56 shall remain unaffected.

(3) The decision shall not be contestable. The application pursuant to subsection (1) and the decision shall be recorded in the files.

Section 55

The lay judges and the associate members of the committee shall receive remuneration pursuant to the Judicial Remuneration and Compensation Act.

Section 56

(1) A coercive fine shall be imposed on lay judges and associate members of the committee who fail to appear at the sittings on time without a sufficient excuse or otherwise shirk their obligations. At the same time they shall be charged with the costs incurred.

(2) The decision shall be made by the judge at the local court after hearing the public prosecution office. If a sufficient excuse is subsequently provided, the decision may be either entirely or partially revoked. A complaint (Beschwerde) by the person concerned against the decision shall be admissible pursuant to the provisions of the Code of Criminal Procedure.

Section 57

The Land agency for the administration of justice shall specify the date by which the lists of nominees are to be compiled and submitted to the judge at the local court as well as the date on which the committee is to be convened and lots are be drawn to select the lay judges.

Section 58

(1) The Land governments shall be authorised to issue ordinances providing that criminal matters, either entirely or partially, as well as certain kinds of decisions in criminal matters and requests for mutual assistance in criminal matters from offices outside the territorial scope of this Act be assigned to a single local court for the districts of several local courts insofar as such concentration serves the purpose of material furtherance or swifter disposal of the proceedings. The Land governments may issue ordinances transferring this authorisation to the Land agencies for the administration of justice.

(2) If a joint court with lay judges is established for the districts of several local courts, the president of the regional court (president of the local court) shall determine the necessary number of principal and alternate lay judges and allocate the number of principal lay judges among the individual local court districts. If the seat of the local court at which a joint court with lay judges is established is a city that encompasses districts of the other local courts or parts thereof, the president of the regional court (president of the local court) shall allocate the number of alternate lay judges among these local courts; the Land agency for the administration of justice may exempt certain local courts herefrom. The president of the local court shall only then take the place of the president of the regional court if all the local courts concerned are subject to his supervision of service.

(3) All the other provisions of this Title shall apply mutatis mutandis.

Title V

Regional courts

Section 59

(1) The regional courts (Landgerichte) shall be composed of a president, presiding judges and additional judges.

(2) The judges at a regional court may at the same time be conferred an additional judicial office at a local court.

(3) Judges on probation and judges by commission may be employed.

Section 60

Civil and criminal divisions shall be established at the regional courts.

Section 61 to 69

(repealed)

Section 70

(1) Insofar as the representation of a member by a member of the same court is not possible, it shall, upon application of the presidium, be arranged by the Land agency for the administration of justice.

(2) The assignment of a judge on probation or a judge by commission shall be limited to a specific period of time and may not be revoked prior to the expiration of this period.

(3) The provisions of Land law pursuant to which judicial functions may only be exercised by judges appointed for life and the provisions of Land law governing representation by judges appointed for life shall remain unaffected.

Section 71

(1) The civil divisions, including the commercial divisions, shall have jurisdiction over all civil disputes that are not assigned to the local courts.

(2) The regional courts shall have exclusive jurisdiction over the following, irrespective of the value of the matter in dispute:

1. claims brought against the fiscal authorities on the basis of civil service law;
2. claims against judges and civil servants for overstepping their official powers or for failing to perform official duties.;
3. claims for damages due to false, misleading or omitted public capital market information.;
4. proceedings under
a) section 324 of the Commercial Code,
b) sections 98, 99, 132, 142, 145, 258, 260, 293c and 315 of the Stock Corporation Act,
c) section 26 of the SE Implementation Act,
d) section 10 of the Company Transformation Act,
e) the Award Proceedings Act,
f) sections 39a and 39b of the Securities Acquisition and Takeover Act.

(3) It shall be left to Land legislation to assign claims against the state or against a corporation established under public law arising out of dispositions of administrative authorities as well as claims arising out of public charges exclusively to the regional courts, irrespective of the value of the matter in dispute.

(4) The Land governments shall be authorised to issue ordinances assigning the decisions in proceedings pursuant to subsection (2), number 4, letters a to e, to one regional court for the districts of several regional courts if this serves to ensure uniform administration of justice. The Land governments may transfer this authorisation to the Land agencies for the administration of justice.

Section 72

(1) The civil divisions, including the commercial divisions, shall be the courts hearing appeals on fact and law and hearing complaints in the civil disputes heard by the local courts, insofar as the higher regional courts do not have jurisdiction. The regional courts shall furthermore be the courts hearing complaints in imprisonment matters and in the matters decided by the adult guardianship courts.

(2) In disputes pursuant to section 43, numbers 1 to 4 and 6 of the Condominium Act, the regional court with jurisdiction for the seat of the higher regional court shall be the joint court hearing appeals on fact and law and hearing complaints for the district of the higher regional court in which the local court has its seat. This shall also apply to the matters specified in section 119 subsection (1), number 1, letters b and c. The Land governments shall be authorised to issue ordinances designating another regional court in the district of the higher regional court instead of this court. The Land governments may transfer this authorisation to the Land agencies for the administration of justice.

Section 73

(1) The criminal divisions shall rule on complaints against directions of a local court judge, as well as against decisions of a local court judge and decisions of benches with lay judges.

(2) The criminal divisions shall furthermore handle the matters assigned to the regional courts under the Code of Criminal Procedure.

Section 73a

(repealed)

Section 74

(1) The criminal divisions, as adjudicating courts of first instance, shall have jurisdiction over all serious criminal offences that do not fall under the jurisdiction of the local court or the higher regional court. They shall also have jurisdiction over all criminal offences where a sentence of imprisonment exceeding four years or committal of the accused to a psychiatric hospital in lieu of or in addition to a penalty or committal of the accused to preventive detention is to be expected or where the public prosecution office prefers charges before the regional court in the cases of section 24 subsection (1), number 3.

(2) In the case of the serious criminal offences of

  1. sexual abuse of children resulting in death (section 176b of the Criminal Code),
  2. sexual coercion and rape resulting in death (section 178 of the Criminal Code),
  3. sexual abuse of persons incapable of resisting resulting in death (section 179 subsection (7) in conjunction with section 178 of the Criminal Code),
  4. murder (section 211 of the Criminal Code),
  5. manslaughter (section 212 of the Criminal Code),
  6. (repealed)
  7. abandonment resulting in death (section 221 subsection (3) of the Criminal Code),
  8. bodily injury resulting in death (section 227 of the Criminal Code),
  9. child stealing resulting in death (section 235 subsection (5) of the Criminal Code),
  10. deprivation of liberty resulting in death (section 239 subsection (4) of the Criminal Code),
  11. extortionate kidnapping resulting in death (section 239a subsection (2) of the Criminal Code),
  12. hostage taking resulting in death (section 239b subsection (2) in conjunction with section 239a subsection (2) of the Criminal Code),
  13. robbery resulting in death (section 251 of the Criminal Code),
  14. robbery-like theft resulting in death (section 252 in conjunction with section 251 of the Criminal Code),
  15. robbery-like extortion resulting in death (section 255 in conjunction with section 251 of the Criminal Code),
  16. arson resulting in death (section 306c of the Criminal Code),
  17. causing an explosion by nuclear power (section 307 subsections (1) to (3) of the Criminal Code),
  18. causing an explosion by use of explosives resulting in death (section 308 subsection (3) of the Criminal Code),
  19. misuse of ionizing radiation exposing a vast number of human beings to such radiation (section 309 subsections (2) and (4) of the Criminal Code),
  20. defective construction of a nuclear facility resulting in death (section 312 subsection (4) of the Criminal Code),
  21. causing a flood resulting in death (section 313 in conjunction with section 308 subsection (3) of the Criminal Code),
  22. poisoning dangerous to the public resulting in death (section 314 in conjunction with section 308 subsection (3) of the Criminal Code),
  23. robbery-like assault on the driver of a motor vehicle resulting in death (section 316a subsection (3) of the Criminal Code),
  24. assaults on air and sea traffic resulting in death (section 316c subsection (3) of the Criminal Code),
  25. damaging important facilities resulting in death (section 318 subsection (4) of the Criminal Code),
  26. an intentional environmental crime resulting in death (section 330 subsection (2), number 2, of the Criminal Code),

a criminal division with lay judges (Schwurgericht) shall have jurisdiction. Section 120 shall remain unaffected.

(3) The criminal divisions shall furthermore have jurisdiction for hearing and ruling on the legal remedy of appeal on fact and law (Berufung) against decisions of a criminal court judge or a court with lay judges.

Section 74a

(1) At the regional courts in the district of which a higher regional court has its seat, a criminal division for the district of this higher regional court shall be the adjudicating court of first instance with jurisdiction over the criminal offences of

  1. crimes against peace in the cases of section 80a of the Criminal Code,
  2. endangering the democratic state based on the rule of law in the cases of sections 84 to 86, sections 87 to 90, section 90a subsection (3) and section 90b of the Criminal Code,
  3. endangering the national defence in the cases of sections 109d to 109g of the Criminal Code,
  4. violation of a ban of an organisation in the cases of section 129, also in conjunction with section 129b subsection (1), of the Criminal Code and section 20 subsection (1), first sentence, numbers 1 to 4, of the Associations Act; this shall not apply if the same act constitutes a criminal offence under the Narcotics Act,
  5. abduction (section 234a of the Criminal Code) and
  6. casting political suspicion (section 241a of the Criminal Code).

(2) The regional court shall not have jurisdiction if the Federal Prosecutor General takes over the prosecution prior to the opening of the main proceedings due to the special significance of the case, unless jurisdiction has been vested in the regional court through referral pursuant to section 142a subsection (4) or referral pursuant to section 120 subsection (2), second sentence.

(3) In the cases over which a criminal division has jurisdiction pursuant to subsection (1), it shall also give the decisions designated in section 73 subsection (1).

(4) At the regional courts in the district of which a higher regional court has its seat, a division that is not seized of main proceedings in criminal matters shall have jurisdiction for the district of this higher regional court to order measures pursuant to section 100c of the Code of Criminal Procedure.

(5) Within the scope of subsections (1), (3) and (4), the district of the regional court shall encompass the district of the higher regional court.

Section 74b

In matters relating to the protection of children and juveniles (section 26 subsection (1), first sentence), the juvenile division as adjudicating court of first instance shall have jurisdiction along with the criminal division with jurisdiction over general criminal matters. Section 26 subsection (2) and sections 73 and 74 shall apply mutatis mutandis.

Section 74c

(1) For criminal offences

1. pursuant to the Patent Law, the Utility Model Act, the Semiconductor Protection Act, the Plant Variety Protection Act, the Trade Mark Act, the Designs Act, the Copyright Act, the Act against Unfair Competition, the Insolvency Statute, the Stock Corporation Act, the Act on the Financial Statements of Certain Enterprises and Groups, the Act on Limited Liability Companies, the Commercial Code, the SE Implementation Act, the Act to Implement Council Regulation (EEC) on the European Economic Interest Grouping (EEIG), the Cooperatives Act, the SCE Implementation Act and the Company Transformation Act,
2. pursuant to the laws governing the banking industry, the custody and acquisition of securities, the stock exchanges and the credit system as well as the Act on the Supervision of Insurance Companies and the Securities Trading Act,
3. pursuant to the Economic Offences Act of 1954, the Foreign Trade and Payments Act and foreign exchange control legislation as well as fiscal monopoly, tax and customs laws, including cases where their criminal provisions are applicable pursuant to other laws; this shall not apply if the same act constitutes a criminal offence under the Narcotics Act and shall not apply to fiscal offences involving the motor vehicle tax,
4. pursuant to the Wine Act and food products legislation,
5. involving subsidy fraud, capital investment fraud, credit fraud, bankruptcy offences, preferential treatment for a creditor and preferential treatment for a debtor,
5a. involving agreements in restriction of competition upon invitations to tender as well as the taking and offering of a bribe in business transactions,
6.
a) involving fraud, computer fraud, breach of trust, usury, the granting of a benefit, the offering of a bribe, and the withholding and embezzlement of wages or salaries,
b) pursuant to the Labour Leasing Act, Book Three of the Social Code and the Act to Combat Clandestine Employment, to the extent that special knowledge of business operations and practices is required in order to judge the case,

insofar as the regional court has jurisdiction as court of first instance pursuant to section 74 subsection (1) and jurisdiction for hearing and ruling on the legal remedy of appeal on fact and law against judgments of a court with lay judges pursuant to section 74 subsection (3), jurisdiction shall be vested in a criminal division as an economic offences division. Section 120 shall remain unaffected.

(2) In the cases over which an economic offences division has jurisdiction pursuant to subsection (1), it shall also give the decisions designated in section 73 subsection (1).

(3) The Land governments shall be authorised, for the purpose of material furtherance or swifter disposal of the proceedings, to issue ordinances assigning to one regional court, either entirely or partially, the criminal matters for the districts of several regional courts that involve the criminal offences designated in subsection (1). The Land governments may transfer this authorisation to the Land agencies for the administration of justice.

(4) Within the scope of subsection (3), the district of the subsequently designated regional court shall encompass the districts of the other regional courts.

Section 74d

(1) The Land governments shall be authorised to issue ordinances assigning to one regional court the criminal matters designated in section 74 subsection (2) for the districts of several regional courts, insofar as this serves the purpose of material furtherance of the proceedings. The Land governments may transfer this authorisation to the Land agencies for the administration of justice.

(2) (repealed)

Section 74e

Among the various criminal divisions with jurisdiction pursuant to the provisions of sections 74 to 74d, precedence shall be accorded

  1. firstly, to the criminal division with lay judges (section 74 subsection (2) and section 74d),
  2. secondly, to the economic offences division (section 74c),
  3. thirdly, to the criminal division pursuant to section 74a.

Section 74f

(1) If at first instance a criminal division has reserved the order of preventive detention or, in the cases of section 66b of the Criminal Code, has ruled as the trial court, this criminal division shall have jurisdiction at first instance for hearing and ruling on the order of preventive detention reserved in the judgment or on the subsequent order of preventive detention.

(2) If in the cases of section 66b of the Criminal Code the local court exclusively has ruled as the trial court at first instance, a criminal division of the superior regional court shall have jurisdiction at first instance for hearing and ruling on the subsequent order of preventive detention.

(3) In the cases of section 66b of the Criminal Code, section 462a subsection (3), second and third sentences of the Code of Criminal Procedure shall apply mutatis mutandis; section 76 subsection (2) of this Act and section 33b subsection (2) of the Juvenile Courts Act shall not apply.

Section 75

The civil divisions shall, insofar as the provisions of procedural law do not provide for a decision to be given by a judge sitting alone in the place of a full bench, be composed of three members including the presiding judge.

Section 76

(1) The criminal divisions shall be composed of three judges, including the presiding judge, and two lay judges (grand criminal divisions); in proceedings involving appeals on fact and law against a judgment of a criminal court judge or of a court with lay judges, they shall be composed of the presiding judge and two lay judges (small criminal divisions). The lay judges shall not participate in decisions made outside the main hearing.

(2) At the opening of the main proceedings, the grand criminal division shall rule that it will be composed of two judges, including the presiding judge, and two lay judges during the main hearing unless a criminal division in the composition of three judges and two lay judges (Schwurgericht) has jurisdiction or the participation of a third judge appears necessary due to the scale or complexity of the case. If a case has been referred back by a court hearing an appeal on law, the then competent criminal division may once again rule on its composition pursuant to the first sentence.

(3) In cases of an appeal on fact and law against a judgment by an extended bench (section 29 subsection (2)), a second judge must be brought in. Decisions outside the main hearing shall be made by the presiding judge alone.

Section 77

(1) The provisions concerning the lay judges serving on the benches of the local courts shall apply mutatis mutandis to the lay judges serving in the criminal divisions of the regional courts with the following proviso:

(2) The president of the regional court shall allocate the number of principal lay judges required for the criminal divisions among the local court districts belonging to the district of the regional court. The alternate lay judges shall be selected by the committee at the local court in the district of which the regional court has its seat. If the regional court has its seat outside its district, the Land agency for the administration of justice shall determine which one of the committees of the local courts belonging to the district of the regional court shall select the alternate lay judges. If the seat of the regional court is a city encompassing two or more of the local court districts, or parts thereof, belonging to the district of the regional court, the first sentence shall apply mutatis mutandis to the selection of the alternate lay judges by the committees established at these local courts; the Land agency for the administration of justice may exempt certain local courts from this arrangement. The names of the selected principal lay judges and alternate lay judges shall be communicated by the judge at the local court to the president of the regional court. The president of the regional court shall consolidate the names of the principal lay judges into the regional courts list of lay judges.

(3) The president of the regional court shall take the place of the local court judge at the drawing of lots to determine the order in which the principal lay judges are to participate in the individual ordinary sittings and the order in which the alternate lay judges are to take the place of lay judges who become unavailable; section 45 subsection (4), third and fourth sentences, shall apply mutatis mutandis. If the lay judge has died or moved out of the district of the regional court, the presiding judge of the criminal division shall order his deletion from the list; in other cases the decision as to whether a lay judge should be deleted from the list of lay judges and the ruling on the grounds for refusal of service put forward by a lay judge shall be given by a criminal division. In all other respects the presiding judge of the criminal division shall take the place of the judge at the local court.

(4) An honorary judge may only be designated either lay judge for a bench of a local court or lay judge for a criminal division of a regional court for one and the same business year. If a person has been appointed to more than one such office in a single district, or to such an office in more than one district, for one and the same business year, the appointee must assume the office to which he was first appointed.

(5) Section 52 subsection (2), first sentence, number 1, shall not apply.

Section 78

(1) Where the distance to the seat of a regional court is great, the Land governments shall be authorised to issue ordinances providing that a criminal division be established at one local court for the district of one or more local courts and that the workload of the criminal division of the regional court involving that district be assigned, either entirely or partially, to that division. The serious criminal offences designated in section 74 subsection (2) may not be assigned to a criminal division established pursuant to the first sentence. The Land governments may transfer this authorisation to the Land agencies for the administration of justice.

(2) The division shall be composed of members of the regional court or judges at the local court of the district for which it is established. The presiding judge and the other members shall be designated by the presidium of the regional court.

(3) The president of the regional court shall allocate the required number of principal lay judges among the local court districts belonging to the district of the criminal division. The alternate lay judges shall be selected by the committee at the local court where the external criminal division has been established. The other functions assigned in section 77 to the president of the regional court shall be exercised by the presiding judge of the criminal division.

Title Va

Criminal divisions with jurisdiction over execution of sentences

Section 78a

(1) Criminal divisions with jurisdiction over execution of sentences (Strafvollstreckungskammern) shall be established at the regional courts if institutions for adults are maintained in their district in which sentences of imprisonment or custodial measures of reform and prevention are executed or if other prison authorities have their seat there. These shall be competent to give the decisions

  1. pursuant to sections 462a and 463 of the Code of Criminal Procedure, except as otherwise provided by the Code of Criminal Procedure,
  2. pursuant to section 50 subsection (5), section 109 and section 138 subsection (3) of the Prison Act,
  3. pursuant to section 50, section 58 subsection (3) and section 71 subsection (4) of the Law on International Judicial Assistance in Criminal Matters.

If a decision on suspension of execution is to be given for more than one prison sentence at the same time pursuant to section 454b subsection (3) of the Code of Criminal Procedure, one criminal division with jurisdiction over execution of sentences shall give a decision on suspension of execution of all of the sentences.

(2) The Land governments shall issue ordinances assigning the criminal matters pursuant to subsection (1), second sentence, number 3, to the regional courts designated in subsection (1), first sentence, for the districts of the regional courts at which no criminal divisions with jurisdiction over execution of sentences are to be established. The Land governments shall be authorised to issue ordinances assigning to one of the regional courts designated in subsection (1) for the districts of several regional courts the criminal matters falling within the competence of the criminal divisions with jurisdiction over execution of sentences and providing that criminal divisions with jurisdiction over execution of sentences also or exclusively have their seat in places within their district where the regional court does not have its seat, insofar as such provisions serve the purpose of material furtherance or swifter disposal of the proceedings. The Land governments may issue ordinances transferring the authorisations pursuant to the first and second sentences to the Land agencies for the administration of justice.

(3) If an institution in which sentences of imprisonment or custodial measures of reform and prevention are executed is maintained by one Land on the territory of another Land, the Länder concerned may agree that competence shall lie with the criminal division with jurisdiction over execution of sentences at that regional court in the district of which the supervisory authority responsible for the institution has its seat.

Section 78b

(1) The criminal divisions with jurisdiction over execution of sentences shall be composed of

  1. three judges, including the presiding judge, in proceedings concerning suspension of execution of the remainder of a sentence of life imprisonment or concerning suspension of execution of committal to a psychiatric hospital or to preventive detention,
  2. one judge in all other cases.

(2) The members of the criminal divisions with jurisdiction over execution of sentences shall be appointed by the presidium of the regional court from among the members of the regional court and the judges in its district who are employed at the local court.

Title VI

Criminal divisions with lay judges

Section 79 to 92

(repealed)

Title VII

Commercial divisions

Section 93

(1) The Land governments shall be authorised to issue ordinances providing that commercial divisions be established at the regional courts for their districts or for geographically limited parts thereof. Such divisions may also have their seat in places within the district of the regional court where the court does not have its seat.

(2) The Land governments may transfer the authorisation pursuant to the first sentence to the Land agencies for the administration of justice.

Section 94

If a commercial division has been established at a regional court, commercial matters shall be handled by this division instead of by the civil divisions subject to the following provisions.

Section 95

(1) Commercial matters within the meaning of this Act shall be civil disputes in which an action is brought to assert a claim:

  1. against a merchant within the meaning of the Commercial Code, insofar as he is registered in the commercial register or the cooperatives register or need not be registered therein pursuant to a special statutory arrangement governing corporate entities established under public law, arising out of transactions that are commercial transactions for both parties;
  2. arsing out of a bill of exchange within the meaning of the Bills of Exchange Act or arising out of one of the documents designated in section 363 of the Commercial Code;
  3. on the basis of the Check Act;
  4. arising out of one of the legal relationships designated hereinafter:
    a) out of the legal relationship between the members of a commercial partnership or cooperative or between the partnership or cooperative and its members or between the silent partner and the owner of the commercial business, both during the existence of and after the dissolution of the partnership relationship, and out of the legal relationship between the managers or liquidators of a commercial partnership or cooperative and the partnership or cooperative or its members;
    b) out of the legal relationship concerning the right to use the commercial firm name;
    c) out of the legal relationships concerning the protection of trademarks, other identifying marks and designs;
    d) out of the legal relationship originating in the acquisition of an existing commercial business “inter vivos” between the previous owner and the acquirer;
    e) out of the legal relationship between a third party and the party liable on grounds of lack of proof of statutory authority or commercial power of attorney;
    f) out of the legal relationships under maritime law, especially those concerning the shipping business, those concerning the rights and obligations of the manager or owner of a ship, the ships husband and the crew of the ship, and those concerning average, compensation for damages in the event of collisions between ships, salvage operations and claims of maritime lien holders;
  5. on the basis of the Act against Unfair Competition, with the exception of claims of the ultimate consumer arising out of section 13a of the Act against Unfair Competition, provided that no mutual commercial transaction pursuant to subsection (1), number 1, exists;
  6. arising out of sections 44 to 47 of the Stock Exchange Act.

(2) Commercial matters within the meaning of this Act shall furthermore be

  1. the legal disputes over which the regional court has jurisdiction pursuant to section 246 subsection (3), first sentence, or section 396 subsection (1), second sentence, of the Stock Corporation Act, pursuant to section 51 subsection (3), third sentence, or section 81 subsection (1), second sentence, of the Cooperatives Act, pursuant to section 87 of the Act against Restraints on Competition and section 13 subsection (4) of the Act implementing the EC Consumer Protection Cooperation Regulation,
  2. the proceedings specified in section 71 subsection (2), number 4, letters b to f.

Section 96

(1) A legal dispute shall be heard by the commercial division if the plaintiff so requests in the statement of claim.

(2) If a legal dispute must be referred by the local court to the regional court pursuant to the provisions of sections 281 and 506 of the Civil Procedure Code, the plaintiff must submit the application for a hearing before the commercial division to the local court.

Section 97

(1) If an action over which the commercial division has no jurisdiction is brought before the commercial division, the legal dispute shall upon application of the defendant be referred to the civil division.

(2) If the action or, in the case of section 506 of the Civil Procedure Code, the cross-action is one over which the commercial division has no jurisdiction, the commercial division shall also be entitled proprio motu to refer the dispute to the civil division as long as no hearing has been held on the main issue and no ruling has been pronounced thereon. The referral proprio motu may not be made on the grounds that the defendant is not a merchant.

Section 98

(1) If an action over which the commercial division has jurisdiction is brought before the civil division, the legal dispute shall upon application of the defendant be referred to the commercial division. A defendant who is not registered in the commercial register or the cooperatives register may not base his application on the assertion that he is a merchant.

(2) The application shall be rejected if the cross-action brought pursuant to section 506 of the Civil Procedure Code would not be an action over which the commercial division has jurisdiction.

(3) The civil division shall not be entitled to make a referral proprio motu.

(4) The civil division shall even then be entitled to reject the application if the plaintiff has consented thereto.

Section 99

(1) If, in a legal dispute pending before the commercial division, the scope of the action is extended pursuant to section 256 subsection (2) of the Civil Procedure Code through an application for determination of the existence or non-existence of a legal relationship or through a cross-action, and if the extended action or cross-action is not an action over which the commercial division has jurisdiction, the dispute shall upon application of the opponent be referred to the civil division.

(2) Subject to the restriction of section 97 subsection (2), the division shall also be entitled to make a referral proprio motu. This authority shall also then accrue if, as a result of amendment of an action, a claim is asserted over which the commercial division has no jurisdiction.

Section 100

Sections 96 to 99 shall apply mutatis mutandis to appellate proceedings before the commercial divisions.

Section 101

(1) An application for referral of a legal dispute to another division shall only be admissible prior to the hearing of the applicant on the matter itself. If the applicant has been set a time limit for responding to an action or an appeal prior to the oral hearing, he must file the application within that time limit. Section 296 subsection (3) of the Civil Procedure Code shall apply mutatis mutandis; the excuse shall be substantiated if the court so requires.

(2) A preliminary decision shall be given on the application. The decision may be given without an oral hearing.

Section 102

The decision on referral of a legal dispute to the civil division or the commercial division shall not be contestable. If the dispute is referred to another division, this decision shall be binding on the division to which the dispute is referred. The date for another oral hearing shall be set proprio motu and announced to the parties.

Section 103

A claim pursuant to section 64 of the Civil Procedure Code may only be asserted before the commercial division if the legal dispute is one over which the commercial division has jurisdiction pursuant to the provisions of sections 94 and 95.

Section 104

(1) Where the commercial division, sitting as the court hearing complaints, is seized of a complaint over which it has no jurisdiction, the complaint shall be referred proprio motu to the civil division. Likewise, where the civil division, sitting as the court hearing complaints, is seized of a complaint relating to a commercial matter, it shall refer the complaint proprio motu to the commercial division. The provisions of section 102, first and second sentences, shall apply mutatis mutandis.

(2) A complaint may not be referred to another division if the case is pending at the division seized of the complaint or if that division has already given a decision on the main issue.

Section 105

(1) The commercial divisions shall give decisions sitting with one member of the regional court as presiding judge and two honorary judges1 , insofar as the presiding judge must not decide in lieu of the division pursuant to the provisions of procedural law.

(2) All members of the commercial division shall have the same voting rights.

(3) (repealed)

1: Italics in section 105 subsection (1): Now “commercial judges”, see Section 45a of the German Judiciary Act 301-1

Section 106

In the cases of section 93 subsection (1), second sentence, a local court judge may be presiding judge of the commercial division.

Section 107

(1) The honorary judges2 who have neither their residence nor their business establishment at the seat of the commercial division shall receive per diem and overnight accommodation allowances pursuant to the provisions applicable to judges at the regional court.

(2) The honorary judges shall be reimbursed for their travel expenses in analogous application of section 5 of the Judicial Remuneration and Compensation Act.

2: Italics in section 105 subsection (1): Now “commercial judges”, see Section 45a of the German Judiciary Act 301-1

Section 108

The honorary judges shall be appointed on the qualified recommendation of the chambers of industry and commerce for a term of five years; re-appointment shall not be excluded.

Section 109

(1) A person may be appointed to the office of honorary judge if he

  1. is a German,
  2. has attained the age of thirty and
  3. is or was registered in the commercial register or in the cooperatives register as a merchant, as a member of the board of management or as a managing director of a corporate entity, or as an officer with statutory authority or if, as a member of the board of management of a corporate entity established under public law, he need not be registered in these registers on the basis of a special statutory arrangement for such corporate entities.

(2) A person who fulfils these requirements should only be appointed if he

  1. lives in the district of the commercial division or
  2. has a business establishment in that district or
  3. is employed by a business enterprise that has its domicile or a branch in that district.

Furthermore, appointment should only be possible in the case of

  1. an officer with statutory authority if he holds a position of responsibility in the enterprise that is comparable to the independent position of an entrepreneur,
  2. a member of the board of management of a cooperative if he is employed full time in a cooperative that engages in commercial activity in a manner similar to a commercial partnership.

(3) A person may not be appointed to the office of honorary judge if he is ineligible for the office of lay judge or should not be appointed to the office of lay judge pursuant to section 33, number 4. A person should not be appointed to the office of honorary judge if he should not be appointed to the office of lay judge pursuant to section 33, number 5.

Section 110

At seaports, honorary judges3 may also be appointed from the circle of individuals with a knowledge of shipping and navigation.

3: Italics in section 105 subsection (1): Now “commercial judges”, see Section 45a of the German Judiciary Act 301-1

Section 111

(repealed)

Section 112

Honorary judges shall have all the rights and duties appurtenant to the office of a judge for the duration of their term of office.

Section 113

(1) An honorary judge shall be removed from office

  1. if he no longer meets one of the necessary criteria for his appointment or if circumstances arise or subsequently become known that constitute an obstacle to an appointment pursuant to section 109 or
  2. if he is guilty of a gross breach of his official duties.

(2) An honorary judge should be removed from office if circumstances arise or become known the existence of which should preclude an appointment pursuant to section 109 subsection (3), second sentence.

(3) The decision shall be given by the first civil division of the higher regional court in a ruling after hearing the person concerned. It shall not be contestable.

(4) If an honorary judge himself asks to be relieved of his office, the decision shall be made by the Land agency for the administration of justice.

Section 114

The commercial division may, on the basis of its own expertise and knowledge, give decisions on matters for which the judgment of a commercial expert is sufficient as well as decisions concerning the existence of commercial practices.

Title VIII

Higher regional courts

Section 115

The higher regional courts (Oberlandesgerichte) shall be composed of a president, presiding judges and additional judges.

Section 115a

(repealed)

Section 116

(1) Civil and criminal divisions shall be established at the higher regional courts. Investigating judges shall be appointed at the higher regional courts with jurisdiction pursuant to section 120; any member of another higher regional court the seat of which is located in the territory designated in section 120 may also be appointed investigating judge.

(2) The Land governments shall be authorised to issue ordinances providing that civil or criminal divisions be established outside the seat of the higher regional court for the district of one or more regional courts and that they be entirely or partially assigned the functions of the civil or criminal divisions of the higher regional court for that district. An external family division may be established for the districts of several family courts.

(3) The Land governments may transfer the authorisation pursuant to subsection (2) to the Land agencies for the administration of justice.

Section 117

The provision of section 70 subsection (1) shall apply mutatis mutandis.

Section 118

The higher regional courts shall have jurisdiction in civil disputes at first instance for hearing and ruling on model case proceedings under the Act on Model Case Proceedings in Disputes under Capital Markets Law.

Section 119

(1) The higher regional courts shall have jurisdiction in civil matters for hearing and ruling on the legal remedies of:

  1. complaint against decisions of the local courts
    a) in the matters decided by the family courts;
    b) in non-contentious matters with the exception of imprisonment matters and the matters decided by the adult guardianship courts;
  2. complaint and appeal on fact and law against decisions of the regional courts.

(2) Section 23b subsections (1) and (2) shall apply mutatis mutandis.

(3) (repealed)

(4) (repealed)

(5) (repealed)

(6) (repealed)

Section 120

(1) In criminal matters, the higher regional courts in the districts of which the Land governments have their seat shall have jurisdiction for the territory of the given Land for hearing and deciding cases at first instance involving

  1. crimes against peace in the cases of section 80 of the Criminal Code,
  2. high treason (sections 81 to 83 of the Criminal Code),
  3. treason and endangering external security (sections 94 to 100a of the Criminal Code) as well as criminal offences pursuant to section 52 subsection (2) of the Patent Law, pursuant to section 9 subsection (2) of the Utility Model Act in conjunction with section 52 subsection (2) of the Patent Law, or pursuant to section 4 subsection (4) of the Semiconductor Protection Act in conjunction with section 9 subsection (2) of the Utility Model Act and section 52 subsection (2) of the Patent Law,
  4. an assault against organs and representatives of foreign states (section 102 of the Criminal Code),
  5. a crime against constitutional organs in the cases of sections 105 and 106 of the Criminal Code,
  6. a violation of a ban of an organisation pursuant to section 129a, also in conjunction with section 129b subsection (1), of the Criminal Code,
  7. failure to report crimes pursuant to section 138 of the Criminal Code if the failure to report concerns a crime falling under the jurisdiction of the higher regional court and
  8. criminal offences pursuant to the Code of Crimes against International Law.

(2) These higher regional courts shall furthermore have jurisdiction for hearing and deciding cases at first instance involving

  1. the criminal offences designated in section 74a subsection (1), if the Federal Prosecutor General takes over the prosecution due to the special significance of the case pursuant to section 74a subsection (2),
  2. murder (section 211 of the Criminal Code), manslaughter (section 212 of the Criminal Code) and the criminal offences designated in section 129a subsection (1), number 2, and section 129a subsection (2) of the Criminal Code, if there is a connection with the activity of an organization not or not only existing in Germany the purpose or activity of which is to commit criminal offences of this kind and the Federal Prosecutor General takes over the prosecution due to the special significance of the case,
  3. murder (section 211 of the Criminal Code), manslaughter (section 212 of the Criminal Code), abduction for the purpose of blackmail (second 239a of the Criminal Code), hostage taking (section 239b of the Criminal Code), serious arson and especially serious arson (sections 306a and 306b of the Criminal Code), arson resulting in death (section 306c of the Criminal Code), causing an explosion by nuclear power in the cases of section 307 subsection (1) and subsection (3), number 1, of the Criminal Code, causing an explosion in the cases of section 308 subsections (1) to (3) of the Criminal Code, misuse of ionizing radiation in the cases of section 309 subsections (1) to (4) of the Criminal Code, acts preparatory to causing an explosion or radiation offence in the cases of section 310 subsection (1), numbers 1 to 3, of the Criminal Code, causing a flood in the cases of the section 313 subsection (2) in conjunction with section 308 subsections (2) and (3) of the Criminal Code, poisoning dangerous to the public in the cases of section 314 subsection (2) in conjunction with section 308 subsections (2) and (3) of the Criminal Code and assaults on air and sea traffic in the cases of section 316c subsections (1) and (3) of the Criminal Code, if under the circumstances the offence is intended to and is capable of
    a) undermining the continued existence or security of a state,
    b) destroying, invalidating or undermining a constitutional principle of the Federal Republic of Germany,
    c) undermining the security of the troops of the North Atlantic Treaty Organization or of its non-German member states stationed in the Federal Republic of Germany or
    d) undermining the continued existence or security of an international organisation and the Federal Prosecutor General takes over the prosecution due to the special significance of the case.
  4. criminal offences pursuant to the Foreign Trade and Payments Act and criminal offences pursuant to section 19 subsection (2), number 2, and section 20 subsection (1) of the Act on the Control of Weapons of War, if under the circumstances the offence
    a) is capable of seriously endangering the external security or the foreign relations of the Federal Republic of Germany or
    b) is intended to and is capable of disrupting the peaceful coexistence of peoples

    and the Federal Prosecutor General takes over the prosecution due to the special significance of the case.

At the opening of the main proceedings they shall, in the cases of number 1, refer the matter to the regional court and, in the cases of numbers 2 to 4, to the regional court or the local court, if the case is not deemed to be of special significance.

(3) In the matters under the jurisdiction of these higher regional courts pursuant to subsections (1) or (2), they shall also give the decisions designated in section 73 subsection (1). They shall furthermore rule on complaints against orders of the investigating judges of the higher regional courts (section 169 subsection (1), first sentence, of the Code of Criminal Procedure) in the cases designated in section 304 subsection (5) of the Code of Criminal Procedure.

(4) These higher regional courts shall also rule on complaints against orders and decisions of the court with jurisdiction pursuant to section 74a. For rulings on complaints against orders and decisions of the court with jurisdiction pursuant to section 74a subsection (4) and in the cases of section 100d subsection (1), sixth sentence, of the Code of Criminal Procedure, a division that is not seized of main proceedings in criminal matters shall have jurisdiction.

(5) The place of jurisdiction shall be governed by the general provisions. The Länder involved may agree to transfer the functions assigned to the higher regional courts under subsections (1) to (4) to the duly competent court of one Land for the territory of another Land as well.

(6) Insofar as the competence of the Federation to prosecute criminal cases has been established pursuant to section 142a, these higher regional courts shall exercise jurisdiction pursuant to Article 96 paragraph (5) of the Basic Law.

(7) Insofar as the Länder, on the basis of criminal proceedings in which the higher regional courts rule in exercise of jurisdiction of the Federation, must bear costs of the proceedings and expenses of participants in the proceedings or pay remuneration, they may request reimbursement from the Federation.

Section 120a

(1) If at first instance a criminal division has reserved the order of preventive detention or, in the cases of section 66b of the Criminal Code, has ruled as the trial court, this criminal division shall have jurisdiction at first instance for hearing and ruling on the order of preventive detention reserved in the judgment or on the subsequent order of preventive detention.

(2) In the cases of section 66b of the Criminal Code, section 462a subsection (3), second and third sentences of the Code of Criminal Procedure shall apply mutatis mutandis.

Section 121

(1) In criminal matters, the higher regional courts shall furthermore have jurisdiction for hearing and ruling on the legal remedies of:

  1. appeal on points of law only against
    a) judgments delivered by criminal court judges that cannot be contested with an appeal on fact and law;
    b) judgments delivered by small criminal divisions and grand criminal divisions in appeals on fact and law;
    c) judgments delivered by the regional court at first instance if the appeal on law is exclusively based on the violation of a legal norm contained in Land legislation;
  2. complaint against decisions of criminal court judges, except where the criminal divisions or the Federal Court of Justice have jurisdiction;
  3. complaint on points of law only against decisions of the criminal divisions with jurisdiction over execution of sentences pursuant to section 50 subsection (5), section 116 and section 138 subsection (3) of the Prison Act and decisions of the juvenile divisions pursuant to section 92 subsection (2) of the Juvenile Courts Act.

(2) If a higher regional court wishes to deviate in its decision pursuant to subsection (1), number 1a or 1b, from a decision given after 1 April 1950, or in its decision pursuant to subsection (1), number 3, from a decision given after 1 January 1977, by another higher regional court or from a decision of the Federal Court of Justice, it must submit the matter to that court.

(3) A Land in which several higher regional courts have been established may, under an ordinance issued by the Land government, assign to one higher regional court or to the highest regional court the decisions pursuant to subsection (1), number 3, for the districts of several higher regional courts, insofar as such assignment serves the purpose of material furtherance or swifter disposal of the proceedings. The Land governments may issue ordinances transferring this authorisation to the Land agencies for the administration of justice.

Section 122

(1) The divisions of the higher regional courts shall, unless decisions are to be given by a judge sitting alone in lieu of a division pursuant to the provisions of procedural law, give decisions sitting with three members, including the presiding judge.

(2) The criminal divisions shall rule on the opening of the main proceedings at first instance sitting with five judges, including the presiding judge. At the opening of the main proceedings, the criminal division shall rule that it will be composed of three judges, including the presiding judge, during the main hearing unless the participation of two more judges appears necessary due to the scale or complexity of the case. The criminal division shall rule on the termination of the main proceedings due to a procedural impediment in the composition prescribed for the main hearing. If a case has been referred back by a court hearing an appeal on law, the then competent criminal division may once again rule on its composition pursuant to the second sentence.

Title IX

Federal Court of Justice

Section 123

The seat of the Federal Court of Justice (Bundesgerichtshof) shall be Karlsruhe.

Section 124

The Federal Court of Justice shall be composed of a president, presiding judges and additional judges.

Section 125

(1) The members of the Federal Court of Justice shall be chosen jointly by the Federal Minister of Justice and the judicial selection committee pursuant to the Judicial Selection Act and shall be appointed by the Federal President.

(2) A person may only be appointed a member of the Federal Court of Justice if he has attained the age of thirty-five.

Section 126 to 129

(repealed)

Section 130

(1) Civil panels and criminal panels shall be established and investigating judges shall be appointed at the Federal Court of Justice. Their number shall be determined by the Federal Minister of Justice.

(2) The Federal Minister of Justice shall be authorised to also establish civil panels and criminal panels outside the seat of the Federal Court of Justice and to determine the official seats of the investigating judges of the Federal Court of Justice.

Section 131

(repealed)

Section 131a

(repealed)

Section 132

(1) A Grand Panel for Civil Matters and a Grand Panel for Criminal Matters shall be established at the Federal Court of Justice. The Grand Panels shall form the United Grand Panels.

(2) In the event that a panel wishes to deviate from the decision of another panel on a legal issue, the Grand Panel for Civil Matters shall decide if a civil panel wishes to deviate from another civil panel or from the Grand Panel for Civil Matters, the Grand Panel for Criminal Matters shall decide if a criminal panel wishes to deviate from another criminal panel or from the Grand Panel for Criminal Matters, and the United Grand Panels shall decide if a civil panel wishes to deviate from a criminal panel or from the Grand Panel for Criminal Matters or if a criminal panel wishes to deviate from a civil panel or from the Grand Panel for Civil Matters or if a panel wishes to deviate from the United Grand Panels.

(3) A submission to the Grand Panel or to the United Grand Panels shall only be admissible if the panel from whose decision there is to be deviation has declared in response to an inquiry of the adjudicating panel that it stands by its legal opinion. If the panel from whose decision there is to be deviation can no longer be seized of the legal issue due to a change in the roster allocating court business, its place shall be taken by the panel that would be competent pursuant to the roster allocating court business for the case in which the divergent decision was given. The ruling on the inquiry and the response shall be given in a ruling by the respective panel in the composition prescribed for judgments; section 97 subsection (2), first sentence, of the Act on Tax Advisors and section 74 subsection (2), first sentence, of the Auditors Regulations shall remain unaffected.

(4) The adjudicating panel may submit an issue of fundamental importance to the Grand Panel for a decision if it deems this necessary for the development of the law or in order to ensure uniform application of the law.

(5) The Grand Panel for Civil Matters shall be composed of the president and one member from each of the civil panels; the Grand Panel for Criminal Matters shall be composed of the president and two members from each of the criminal panels. If submission is by another panel, or if there is to be deviation from the decision of another panel, a member of that panel shall also sit on the Grand Panel. The United Grand Panels shall be composed of the president and the members of the Grand Panels.

(6) The members and their deputies shall be appointed by the presidium for one business year. This shall also apply to the member of another panel pursuant to subsection (5), second sentence, and to his deputy. The Grand Panels and the United Grand Panels shall be presided over by the president or, in the event that he is unable to be present, by the most senior member. In the case of a tie, the presiding judge shall have the casting vote.

Section 133

In civil matters, the Federal Court of Justice shall have jurisdiction for hearing and ruling on the legal remedies of appeal on points of law only (Revision), immediate appeal on law only in lieu of an appeal on fact and law (Sprungrevision), complaint on points of law only (Rechtsbeschwerde) and immediate complaint on points of law only in lieu of a complaint (Sprungrechtsbeschwerde).

Section 134

(repealed)

Section 134a

(repealed)

Section 135

(1) In criminal matters, the Federal Court of Justice shall have jurisdiction for hearing and ruling on the legal remedy of appeal on points of law only (Revision) against judgments of the higher regional courts at first instance and against judgments of the regional courts at first instance, unless the jurisdiction of the higher regional courts has been established.

(2) The Federal Court of Justice shall furthermore rule on complaints against orders and directions given by the higher regional courts in the cases designated in section 138d subsection (6), first sentence, section 304 subsection (4), second sentence, and section 310 subsection (1) of the Code of Criminal Procedure as well as on complaints against directions of the investigating judge at the Federal Court of Justice (section 169 subsection (1), second sentence, of the Code of Criminal Procedure) in the cases designated in section 304 subsection (5) of the Code of Criminal Procedure.

Section 136

(repealed)

Section 137

(repealed)

Section 138

(1) The Grand Panels and the United Grand Panels shall give a decision on the point of law only. They may decide without an oral hearing. The decision shall be binding on the panel adjudicating the case at hand.

(2) The Federal Prosecutor General shall be heard prior to the decision of the Grand Panel for Criminal Matters or the United Grand Panels and in legal disputes the subject of which is the contestation of a declaration of death. The Federal Prosecutor General may also present his opinion at the sitting.

(3) If a decision on the matter requires another oral hearing before the adjudicating panel, the participants shall be summoned to the hearing and informed in the summons of the decision given on the point of law.

Section 139

(1) The panels of the Federal Court of Justice shall give decisions sitting with five members, including the presiding judge.

(2) The criminal panels shall give decisions on complaints sitting with three members, including the presiding judge. This shall not apply to the decision on complaints against rulings through which the opening of the main proceedings is refused or the proceedings are terminated due to a procedural impediment.

Section 140

The official procedure shall be governed by rules of procedure that shall be adopted by the full court.

Title IXa

Jurisdiction over proceedings to reopen cases in criminal matters

Section 140a

(1) In proceedings to reopen a case, a decision shall be given by another court with the same substantive jurisdiction as the court against whose decision the application for the reopening of proceedings is directed. The decision on an application against a judgment delivered in appellate proceedings on law shall be given by another court of the same rank as the court against whose judgment the appeal on law was filed.

(2) Prior to the beginning of the business year, the presidium of the higher regional court shall designate the courts within its district that shall have local jurisdiction over decisions in proceedings to reopen cases.

(3) If only one regional court has been established within the district of a higher regional court, the decision on an application over which the regional court has jurisdiction pursuant to subsection (1) shall be given by another criminal division of the regional court, which shall be designated by the presidium of the higher regional court prior to the beginning of the business year. The Land governments shall be authorised to issue ordinances providing that the decision to be given pursuant to subsection (2) by the presidium of a higher regional court in the district of which only one regional court has been established be assigned to the presidium of a neighbouring higher regional court in respect of those applications over which the regional court has jurisdiction pursuant to subsection (1). The Land governments may issue ordinances transferring this authorisation to the Land agencies for the administration of justice.

(4) In the Länder in which only one higher regional court and only one regional court have been established, subsection (3), first sentence, shall apply mutatis mutandis. The Land governments of these Länder shall be authorised to agree with a neighbouring Land that the duties of the presidium of the higher regional court pursuant to subsection (2) shall be transferred to a neighbouring higher regional court of another Land in respect of applications over which the regional court has jurisdiction pursuant to subsection (1).

(5) In the Länder in which only one regional court has been established and in which one local court has been assigned the criminal matters for the districts of the other local courts, subsection (3), first sentence, and section (4), second sentence, shall apply mutatis mutandis.

(6) If the reopening of proceedings is requested for a case that was decided by a higher regional court at first instance, another division of this higher regional court shall have jurisdiction. Section 120 subsection (5), second sentence, shall apply mutatis mutandis.

(7) Subsections (1) to (6) shall apply mutatis mutandis to decisions on applications to prepare for the reopening of proceedings.

Title X

Public prosecution office

Section 141

A public prosecution office should exist at each court.

Section 142

(1) The official duties of the public prosecution office shall be discharged:

  1. at the Federal Court of Justice by a Federal Prosecutor General and by one or more federal prosecutors;
  2. at the higher regional courts and the regional courts by one or more public prosecutors;
  3. at the local courts by one or more public prosecutors or officials of the public prosecution office with a right of audience before the local courts.

(2) The competence of the officials of the public prosecution office with a right of audience before the local courts shall not encompass the local court proceedings to prepare public charges in criminal matters falling under the jurisdiction of courts other than the local courts.

(3) Trainee jurists may be assigned responsibility for discharging the duties of an official of the public prosecution office with a right of audience before the local courts and, in an individual case, for discharging the duties of a public prosecutor under the latters supervision.

Section 142a

(1) The Federal Prosecutor General shall discharge the duties of the public prosecution office in respect of the criminal matters falling under the jurisdiction of the higher regional courts at first instance (section 120 subsections (1) and (2)) at these courts as well. If, in the cases of section 120 subsection (1), the officials of the public prosecution office of a Land and the Federal Prosecutor General cannot agree which of them should take over the prosecution, the Federal Prosecutor General shall decide.

(2) The Federal Prosecutor General shall refer the proceedings to the Land public prosecution office prior to filing a bill of indictment or a written application (section 440 of the Code of Criminal Procedure)

  1. if the following criminal offences are the subject of the proceedings:
    a) criminal offences pursuant to section 82, section 83 subsection (2) or sections 98, 99 or 102 of the Criminal Code,
    b) criminal offences pursuant to sections 105 or 106 of the Criminal Code, if the offence is directed against an organ of a Land or against a member of such an organ,
    c) criminal offences pursuant to section 138 of the Criminal Code in conjunction with one of the provisions of the Criminal Code designated in letter a) or
    d) criminal offences pursuant to section 52 subsection (2) of the Patent Law, pursuant to section 9 subsection (2) of the Utility Model Act in conjunction with section 52 subsection (2) of the Patent Law, or pursuant to section 4 subsection (4) of the Semiconductor Protection Act in conjunction with section 9 subsection (2) of the Utility Model Act and section 52 subsection (2) of the Patent Law;
  2. in cases of lesser importance.

(3) The proceedings shall not be referred to the Land public prosecution office

  1. if the offence affects the interests of the Federation to a considerable degree or
  2. if it is advisable in the interest of legal uniformity for the Federal Prosecutor General to prosecute the offence.

(4) The Federal Prosecutor General shall refer a case that he has taken over pursuant to section 120 subsection (2), numbers 2 to 4, or pursuant to section 74a subsection (2) back to the Land public prosecution office if the case is no longer of special significance.

Section 143

(1) The local competence of the officials of the public prosecution office shall be determined by the local jurisdiction of the court for which they are appointed.

(2) In exigent circumstances, an official of the public prosecution office who lacks competence must perform the official acts necessary in his district.

(3) If the officials of the public prosecution office from different Länder cannot agree which one of them is to take over the prosecution, the official of the public prosecution office who is their common superior shall decide; otherwise the Federal Prosecutor General shall decide.

(4) The officials of one public prosecution office may be assigned competence for the districts of several regional or higher regional courts for the prosecution of certain kinds of criminal matters, for the execution of sentences in respect of these matters, and for the processing of requests for mutual judicial assistance from offices outside the territorial scope of this Act, insofar as such assignment serves the purpose of material furtherance or swifter disposal of the proceedings; in such cases the local competence of the officials of the public prosecution office for the matters assigned to them shall encompass all the courts of the districts for which they have been assigned these matters.

(5) The Land governments shall be authorised to issue ordinances providing that competence for execution of sentences or for execution of measures of reform and prevention be assigned either entirely or partially to a single public prosecution office for the districts of several Regional or higher regional courts, insofar as such assignment serves the purpose of material furtherance or swifter disposal of the execution proceedings. The Land governments may issue ordinances transferring this authorisation to the Land agencies for the administration of justice.

Section 144

If the public prosecution office of a court is composed of several officials, the persons assigned to the highest-ranking official shall act as his deputy; they shall, when they act in his stead, be authorised to perform all his official tasks without proof of a special commission.

Section 145

(1) The highest-ranking officials of the public prosecution office at the higher regional courts and the regional courts shall be entitled to take over all the official tasks of the public prosecution office at all the courts in their district themselves or to commission an official other than the initially competent official to perform these tasks.

(2) Officials of the public prosecution office with a right of audience before the local courts may only discharge the official duties of the public prosecution office at the local courts.

Section 145a

(repealed)

Section 146

The officials of the public prosecution office must comply with the official instructions of their superiors.

Section 147

The right of supervision and direction shall lie with:

  1. the Federal Minister of Justice in respect of the Federal Prosecutor General and the federal prosecutors;
  2. the Land agency for the administration of justice in respect of all the officials of the public prosecution office of the Land concerned;
  3. the highest-ranking official of the public prosecution office at the higher regional courts and the regional courts in respect of all the officials of the public prosecution office of the given courts district.

Section 148

The Federal Prosecutor General and the federal prosecutors shall be civil servants.

Section 149

The Federal Prosecutor General and the federal prosecutors shall be appointed by the Federal President on the proposal of the Federal Minister of Justice, which shall require the approval of the Bundesrat.

Section 150

The public prosecution office shall be independent of the courts in the performance of its official tasks.

Section 151

The public prosecutors may not perform judicial functions. They also may not be assigned responsibility for supervising the service of judges.

Section 152

(1) The investigative personnel of the public prosecution office shall be obliged in this capacity to comply with the orders of the public prosecution office of their district and the orders of the officials superior thereto.

(2) The Land governments shall be authorised to issue ordinances designating the groups of civil servants and salaried staff who are to be subject to this provision. The salaried staff must be public service employees, must have attained the age of 21 and must have been employed in the designated groups of civil servants or salaried staff for at least two years. The Land governments may issue ordinances transferring this authorisation to the Land agencies for the administrationof justice.

Title XI

Court registry

Section 153

(1) A court registry staffed with the necessary number of registry clerks shall be established at each court and at each public prosecution office.

(2) Anyone who has completed two years of preparatory training (Vorbereitungsdienst) and passed the examination for the intermediate judicial service or for the intermediate service in the area of labour jurisdiction may be entrusted with the duties of a registry clerk of the court registry. Six months of the preparatory training should consist of a specialised course of instruction.

(3) Anyone

  1. who has passed the judicial administration officers examination or the examination for the higher intermediate service in the area of labour jurisdiction,
  2. who has qualified for a career in the intermediate judicial service pursuant to the provisions governing career track changes,
  3. who, as another applicant (section 4 subsection (3) of the Framework Act to Harmonise Civil Service Law), has been admitted to the intermediate judicial service career track pursuant to the provisions of Land law

may also be entrusted with the duties of a registry clerk of the court registry.

(4) The detailed provisions governing implementation of subsections (1) to (3) shall be enacted by the Federation and the Länder for their areas. They may also specify whether and to what extent periods of other training or employment conducive to realisation of the training objective may be credited towards the period of preparatory training.

(5) The Federation and the Länder may furthermore specify that a person may also be entrusted with the duties of a registry clerk of the court registry if he can demonstrate a level of knowledge and proficiency in the area of expertise to be transferred to him that is equivalent to the level imparted through the training pursuant to subsection (2). In the Länder Brandenburg, Mecklenburg-Western Pomerania, Saxony, Saxony-Anhalt and Thuringia, those persons may continue to be entrusted with the duties of a registry clerk of the court registry who were entrusted with such duties until 25 April 2006 pursuant to Annex I Chapter III Subject Area A Section III, number 1, letter q, paragraph (1), of the Unification Treaty of 31 August 1990 (Federal Law Gazette 1990, Part II, pages 889, 922).

Title XII

Officials entrusted with service and execution

Section 154

The status and duties of the officials entrusted with service, summons and execution (court bailiffs) shall be determined at the Federal Court of Justice by the Federal Minister of Justice and at the regional courts by the Land agency for the administration of justice.

Section 155

The court bailiff shall be barred by law from exercising his office:

I. in civil disputes:
  1. if he himself is a party or the statutory representative of a party or is jointly entitled or jointly obligated along with a party or is liable for damages to a party;
  2. if his spouse or same sex partner is a party, even if the marriage or same sex partnership no longer exists;
  3. if a party is a person with whom he is or was lineally related or related by marriage, collaterally related to the third degree, or related by marriage to the second degree;
II. in criminal matters:
  1. if he himself was aggrieved by the criminal offence;
  2. if he is or was the spouse or same sex partner of the accused or of the aggrieved party;
  3. if he is or was related or related by marriage to the accused or to the aggrieved party in the manner designated under number I 3.

Title XIII

Mutual judicial assistance

Section 156

The courts shall provide mutual judicial assistance in civil matters and in criminal matters.

Section 156a Costs and Financing of Redevelopment Measures

(1) Where subsequent to implementation of the urban redevelopment measure and the transference of the trust assets of the redevelopment agency to the municipality the municipality finds itself with a surplus resulting from the revenues received in respect of the preparation and implementation of the urban redevelopment measure being in access of the expenditure incurred in connection with this measure, this surplus shall be divided among the owners of the plots located within the redevelopment area. The applicable status of ownership shall be that as of the date of publication of the resolution on the formal designation of the redevelopment area. Where the title to the property has passed by way of sale to another owner subsequent to this point, the amount to be apportioned to the property shall be shared equally between the previous owner and the owner who was required under Section 154 to render a financial settlement.

(2) The surplus shall be apportioned to the individual plots reflecting the initial values of the plots within the meaning of Section 154 para. 2.

(3) In calculating the surplus the municipality shall deduct any subsidies which have been granted out of other public funds either to the municipality or to property owners to cover the costs of preparation and implementation of the redevelopment measure. Other details of the procedure for distribution of the surplus shall be governed by the provisions of state law.

Section 157

(1) A request for mutual judicial assistance shall be addressed to the local court in the district of which the official act is to be performed.

(2) The Land governments shall be authorised to issue ordinances providing that the handling of requests for mutual judicial assistance be assigned either entirely or partially to a single local court for the districts of several local courts insofar as this serves to facilitate or expedite the provision of mutual judicial assistance in general. The Land governments may issue ordinances transferring this authorisation to the Land agencies for the administration of justice.

Section 158

(1) A request may not be refused.

(2) A request by a court that is not a superior appellate instance must, however, be refused if the act to be performed is prohibited by the law of court to which the request has been addressed. If the requested court does not have local jurisdiction, it shall refer the request to the competent court.

Section 159

(1) If a request is refused, or if it is granted in contravention of the provision of section 158 subsection (2), the matter shall be decided by the higher regional court to the district of which the requested court belongs. The decision shall only be contestable if it declares the mutual judicial assistance to be inadmissible and the requesting and requested courts belong to the districts of different higher regional courts. The Federal Court of Justice shall rule on the complaint.

(2) The decisions shall, upon application of the participants or the requesting court, be given without an oral hearing.

Section 160

Execution, summons and service shall be effected pursuant to the provisions of procedural law, irrespective of whether they are to be performed in the Land to which the trial court belongs or in another German Land.

Section 161

Courts, public prosecution offices and court registries may, for the purpose of commissioning a court bailiff, avail themselves of the assistance of the court registry of the local court in the district of which the commission is to be executed. The court bailiff commissioned by the court registry shall be deemed to be directly commissioned.

Section 162

If a person sentenced to a term of imprisonment is staying at a place outside the district of the executing authority, this authority may request the public prosecution office of the regional court in the district of which the convicted person is staying to execute the sentence.

Section 163

If a prison sentence is to be executed in the district of another court or if a convicted person staying in the district of another court is to be apprehended and handed over in order to serve his sentence, the public prosecution office at the regional court of that district shall be asked to perform the act.

Section 164

(1) The costs and expenses entailed in the provision of mutual judicial assistance shall not be reimbursed by the requesting authority.

(2) Fees or other public charges to which the documents (certificates, records) sent by the requesting authority are subject pursuant to the law of the requested authority shall not be levied.

Section 165

(repealed)

Section 166

Within the territorial scope of this Act, a court may also perform official acts outside its district.

Section 167

(1) The police officers of one German Land shall be authorised to continue to pursue a fugitive on the territory of another German Land and to apprehend the fugitive there.

(2) The apprehended person shall be taken without delay to the nearest court or the nearest police authority of the Land in which he was apprehended.

Section 168

The provisions existing in one German Land concerning the communication of files of a public authority to a court of that Land shall also apply in the event that the requesting court belongs to another German Land.

Title XIV

Publicity and court officers

Section 169

The hearing before the adjudicating court, including the pronouncement of judgments and rulings, shall be public. Audio and television or radio recordings as well as audio and film recordings intended for public presentation or for publication of their content shall be inadmissible.

Section 170

(1) Proceedings, discussions and hearings in family matters and in non-contentious matters shall not be public. The court may admit the public but not, however, against the will of a participant. In adult guardianship and committal matters, at the request of the person concerned a person of his confidence shall be permitted to be present.

(2) The court hearing a complaint on points of law only may admit the public unless there is an overriding interest of a participant in non-public discussion.

Section 171

(repealed)

Section 171a

The public may be excluded from the main hearing or from a part thereof if the subject of the proceedings is the committal of the accused to a psychiatric hospital or to an institution for withdrawal treatment in lieu of or in addition to a penalty.

Section 171b

(1) The public may be excluded if circumstances from the private sphere of a participant in the proceedings, a witness or a person aggrieved by an unlawful act (section 11 subsection (1), number 5, of the Criminal Code) are mentioned, the public discussion of which would violate interests that are worthy of protection, unless there is an overriding interest in public discussion of these circumstances. This shall not apply if the persons whose private sphere is affected object to exclusion of the public in the main hearing.

(2) The public shall be excluded if the preconditions of subsection (1), first sentence, exist and the person whose private sphere is affected applies for such exclusion.

(3) The decisions pursuant to subsections (1) and (2) shall not be contestable.

Section 172

The court may exclude the public from a hearing or from a part thereof if

1. endangerment of state security, the public order or public morals is to be feared,
1a. endangerment of the life, limb or liberty of a witness or another person is to be feared,
2. an important business, trade, invention or tax secret is mentioned, the public discussion of which would violate overriding interests worthy of protection,
3. a private secret is discussed, the unauthorised disclosure of which by a witness or expert carries a penalty,
4. a person under the age of 18 is examined.

Section 173

(1) The pronouncement of the judgment shall in any case be public.

(2) The public may, under the preconditions of sections 171b and 172, also be excluded from the pronouncement of the reasons for the judgment or a part thereof by a special ruling of the court.

Section 174

(1) The issue of exclusion of the public shall be discussed in a non-public sitting if a participant so applies or if the court deems this appropriate. The ruling excluding the public must be pronounced in public; it may be pronounced in a non-public sitting if there is fear that its public pronouncement would seriously disrupt order in the sitting. In the cases of sections 171b, 172 and 173, the reason for exclusion of the public must be stated at the time of pronouncement.

(2) Insofar as the public is excluded on the grounds of endangerment of state security, the press, radio and television may not make public any reports concerning the hearing or the content of an official document relating to the matter.

(3) If the public has been excluded on the grounds of endangerment of state security or on the grounds designated in section 171b and section 172, numbers 2 and 3, the court may obligate the persons present to observe secrecy in respect of facts of which they become aware in the course of the hearing or through an official document relating to the matter. The ruling shall be included in the record of the sitting. It shall be contestable. The complaint shall not have suspensive effect.

Section 175

(1) Access to public hearings may be denied to minors and to persons who appear in a manner that is not in keeping with the dignity of the court.

(2) The court may grant individuals access to non-public hearings. In criminal matters, the aggrieved person should be granted access. The participants need not be heard.

(3) Exclusion of the public shall not constitute an obstacle to the presence of the judicial administration officials responsible for supervision of service at the hearings before the adjudicating court.

Section 176

The maintenance of order in the sitting shall be incumbent upon the presiding judge.

Section 177

Parties, accused persons, witnesses, experts or persons not participating in the hearing who fail to follow the orders given to maintain order may be removed from the courtroom or taken into coercive detention and held for a period of time to be determined; such period may not exceed twenty-four hours. Decisions on measures pursuant to the first sentence in respect of persons who are not participants in the hearing shall be made by the presiding judge and in all other cases by the court.

Section 178

(1) A coercive fine of up to one thousand euros may be imposed or coercive detention of up to one week may be ordered and immediately executed against parties, accused persons, witnesses, experts or persons not participating in the hearing who are found to be in contempt of court at the sitting, subject to prosecution by a criminal court. At the time the coercive fine is imposed, a determination shall also be made concerning the extent to which it shall be replaced by coercive detention in event that the fine cannot be collected.

(2) The decision on imposition of coercive measures in respect of persons who are not participants in the hearing shall be made by the presiding judge and in all other cases by the court.

(3) If a person is later sentenced for the same offence, the coercive fine or coercive detention shall be credited against the sentence.

Section 179

Execution of the coercive measures designated hereinbefore shall be ordered directly by the presiding judge.

Section 180

The powers designated in sections 176 to 179 shall also be vested in a single judge performing official acts outside the sitting.

Section 181

(1) If, in the cases of sections 178 and 180, a coercive measure has been imposed, a complaint may be lodged against the decision within a time limit of one week after its notification unless it has been given by the Federal Court of Justice or by a higher regional court.

(2) The complaint shall not have suspensive effect in the case of section 178 and shall have suspensive effect in the case of section 180.

(3) The higher regional court shall rule on the complaint.

Section 182

If a coercive measure has been imposed for contempt of court, or if a person has been taken into coercive detention, or if a person participating in the hearing has been removed from the courtroom, the ruling of the court and the reasons therefor shall be included in the record of the proceedings.

Section 183

If a criminal offence is committed at the sitting, the court must establish the facts and communicate the record thereof to the competent authority. Where appropriate, the provisional arrest of the perpetrator shall be ordered.

Title XV

Language of the court, communication with the court

Section 184

The language of the court shall be German. The right of the Sorbs to speak Sorbian before the courts in the home districts of the Sorbian population shall be guaranteed.

Section 185

(1) If persons are participating in the hearing who do not have a command of the German language, an interpreter shall be called in. No additional record shall be made in the foreign language; however, testimony and declarations given in the foreign language should also be included in the record or appended thereto in the foreign language if and to the extent that the judge deems this necessary in view of the importance of the case. Where appropriate, a translation to be certified by the interpreter should be annexed to the record.

(2) An interpreter may be dispensed with if all the persons involved have a command of the foreign language.

(3) In family matters and in non-contentious matters, an interpreter need not be called in if the judge has a command of the language in which the persons involved make their statements.

Section 186

(1) Communication with a hearing-impaired or speech-impaired person during the hearing shall, at his choice, take place orally, in writing or with the assistance of a communication facilitator to be called in by the court. The court shall furnish suitable technical aids for oral and written communication. The hearing-impaired or speech-impaired person shall be advised of his right to choose.

(2) The court may require written communication or order a person to be called in as an interpreter if the hearing-impaired or speech-impaired person has not availed himself of his right to choose pursuant to subsection (1) or if adequate communication is not possible in the form chosen pursuant to subsection (1) or would require disproportionate effort.

Section 187

(1) The court shall call in an interpreter or a translator for an accused or convicted person who does not have a command of the German language or is hearing impaired or speech impaired, insofar as this is necessary for the exercise of his rights under the law of criminal procedure.

(2) Subsection (1) shall also apply to persons who have the right to join a public prosecution as a private accessory prosecutor pursuant to section 395 of the Code of Criminal Procedure.

Section 188

Persons who do not have a command of the German language shall swear oaths in the language they speak fluently.

Section 189

(1) The interpreter shall swear an oath affirming that he will translate faithfully and conscientiously. If the interpreter states that he does not wish to swear an oath for reasons of faith or conscience, he shall make an affirmation. This affirmation shall be equivalent to an oath; the interpreter shall be informed of this fact.

(2) If the interpreter has been generally sworn for translations of the kind involved in one Land pursuant to the provisions of Land law, a reference to this oath shall be sufficient before all courts of the Federation and the Länder.

(3) In family matters and in non-contentious matters, the interpreter need not be sworn if the persons involved waive this requirement.

Section 190

The services of an interpreter may be rendered by the registry clerk of the court registry. No special administration of an oath shall be required.

Section 191

The provisions governing the exclusion and rejection of experts shall apply mutatis mutandis to the interpreter. The decision shall be made by the court or by the judge who called in the interpreter.

Section 191a

(1) A blind or visually impaired person may, as provided in the ordinance pursuant to subsection (2), demand that the court documents intended for him also be made available to him in a form accessible to him to the extent that this is necessary in order to safeguard his rights in the proceedings. There shall be no charge for this.

(2) The Federal Ministry of Justice shall specify in an ordinance, which shall require the approval of the Bundesrat, the conditions under which and the manner in which the documents mentioned in subsection (1) and the documents submitted by the parties for the record shall be made accessible to a blind or visually impaired person as well as whether and how this person is to participate in the safeguarding of his rights.

Title XVI

Deliberations and voting

Section 192

(1) Only the statutory number of judges may participate in decisions.

(2) At hearings of lengthy duration, the presiding judge may order that additional judges be called in to attend the hearing and take the place of a judge in the event that he is unable to be present.

(3) These provisions shall also be applicable to lay judges.

Section 193

(1) Except for the judges who have been appointed to give the decision, only those persons who are employed at the same court for the purposes of their judicial training and the specialist auxiliary staff who are employed there may be present during deliberations and voting, insofar as the presiding judge permits them to be present.

(2) Foreign professional judges, public prosecutors and attorneys-at-law who have been assigned to a court in the context of a study visit may be present during deliberations and voting at the same court, insofar as the presiding judge permits them to be present and they are placed under an obligation pursuant to subsections (3) and (4). The first sentence shall apply mutatis mutandis to foreign jurists who are undergoing training in the seconding state.

(3) The persons designated in subsection (2) shall upon their application be placed under a special obligation to observe secrecy. Section 1 subsections (2) and (3) of the Obligations Act of 2 March 1974 (Federal Law Gazette I, page 469, page 547 – Article 42) shall apply mutatis mutandis. Persons who have been placed under a special obligation pursuant to the first sentence shall be deemed to be the equivalent of persons with special public service obligations for the purposes of application of the provisions of the Criminal Code on the violation of private secrets (section 203 subsection (2), first sentence, number 2, section 203 subsection (2), second sentence, section 203 subsections (4) and (5), and section 205), exploitation of secrets of another (sections 204 and 205), violation of official secrecy (section 353b subsection (1), first sentence, number 2, section 353b subsection (1), second sentence, and section 353b subsections (3) and (4)) and violation of tax secrecy (section 355).

(4) The obligation shall be imposed by the president or by the supervising judge of the court. He may transfer this authority to the presiding judge of the adjudicating body or to the judge to whom the persons designated in subsection (2) have been assigned. A renewal of the obligation shall not be required for the duration of the study visit. In the cases of section 355 of the Criminal Code, the judge imposing the obligation shall be entitled to file a complaint collateral to the aggrieved party.

Section 194

(1) The presiding judge shall preside over the deliberations, ask the questions and collect the votes.

(2) Differences of opinion concerning the subject matter, wording and sequence of the questions or concerning the result of the vote shall be resolved by the court.

Section 195

No judge or lay judge may refuse to vote on a question because he was in the minority when a vote was taken on a previous question.

Section 196

(1) The court shall give its decisions by an absolute majority vote unless otherwise provided by statute.

(2) If more than two opinions emerge in connection with amounts to be decided and no one of them can command a majority, the number of votes cast for the largest amount shall be added to the votes initially cast for the next smaller amount(s) until a majority is reached.

(3) If more than two opinions emerge in a criminal matter, aside from the question of guilt, and no one of them can command the necessary majority, the votes cast for the decision most unfavourable to the accused shall be added to those initially cast for the next less unfavourable decision(s) until the necessary majority is reached. If two opinions emerge on the question of sentencing and neither can command the necessary majority, the more lenient opinion shall prevail.

(4) If there is a tie at a court composed of two judges and two lay judges on an issue to be decided by a simple majority, the presiding judge shall have the casting vote.

Section 197

The judges shall vote in order of seniority, and in a case of equal seniority in order of age, whereas the honorary judges and lay judges shall vote in order of age; the younger one shall vote before the older one. The lay judges shall vote before the judges. If a rapporteur has been appointed, he shall vote first. The presiding judge shall vote last.

Section 198

(repealed)

 

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