(1) A social plan established subsequent to the opening of insolvency proceedings may provide for a total amount of up to two and a half month’s earnings (section 10 (3) of the Act on Protection against Dismissal (Kündigungsschutzgesetz)) of the dismissed employees to compensate for or mitigate their economic disadvantages under the envisaged operational changes.
(2) The obligations under such social plan are obligations incumbent on the insolvency estate. However, if no insolvency plan comes into being, no more than one third of the insolvency estate available for distribution among the insolvency creditors 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 is to be reduced pro rata.
(3) Whenever adequate cash funds are available in the insolvency estate, the insolvency administrator is, as a rule, to make advance payments on social plan claims with the consent of the insolvency court. No execution into the insolvency estate for social plan claims is permitted.