Informing creditors in insolvency proceedings and order of priority in insolvency

(1) Together with the opening order, the registry of the insolvency court must send creditors a form headed, in all the official languages of the states of the European Economic Area, with the words "Invitation to lodge and explain a claim. Observe the time limits!" The form is published by the Federal Ministry of Justice and Consumer Protection in the Federal Gazette and contains, in particular, the following particulars: 1. which time limits are to be observed and what consequences follow from missing them; 2. who is responsible for receiving the lodging and explanation of a claim; 3. what further measures are prescribed; 4. what significance the lodging of the claim has for preferential or secured creditors, and to what extent they must lodge their claims.
(2) Creditors with their habitual residence, domicile, or registered office in another state of the European Economic Area may lodge their claims in the official language, or one of the official languages, of that state. The lodgement must be headed, in German, with the words "Lodgement and explanation of a claim." On request, the creditor must submit a translation of the lodgement and the explanation, certified by a person authorised to do so in the state referred to in the first sentence.
(3) The insolvency administrator must regularly inform the creditors, in a suitable form, of the progress of the insolvency proceedings.
(4) Ahead of the other insolvency claims, the following are satisfied, in the following order of priority, and, within the same rank, in proportion to their amounts: 1. covered deposits within the meaning of section 2(3), point 23, of the Recovery and Resolution Act, and claims that have passed to the deposit guarantee scheme as a result of the satisfaction of a compensation claim under section 16 of the Deposit Guarantee Act; 2. eligible deposits within the meaning of section 2(3), point 18, of the Recovery and Resolution Act of natural persons, micro enterprises, and small and medium-sized enterprises under Article 2(1) of the Annex to Commission Recommendation 2003/361/EC of 6 May 2003 concerning the definition of micro, small, and medium-sized enterprises (OJ L 124, 20.5.2003, p. 36), and such deposits at institutions with their registered office in the European Union that would be eligible deposits had they not been accepted by their establishments outside the European Union.
(5) Of the claims within the meaning of section 38 of the Insolvency Code, the claims that are not debt instruments under subsection (6), first sentence, are satisfied first.
(6) Debt instruments within the meaning of this sentence are bearer bonds and order bonds, and rights comparable to these debt instruments that are, by their nature, tradeable on the capital markets, as well as registered debt certificates (Schuldscheindarlehen) and registered bonds that do not fall under deposits within subsection (4), point 1 or 2, that have a contractual term of at least one year at the time of their issue, provided that the contractual terms of the debt instrument expressly refer to the lower rank in insolvency proceedings determined by subsection (5). Where there is a duty to publish a prospectus, the reference must also be included in the prospectus to be published. Debt instruments falling within the scope of section 91(2) of the Recovery and Resolution Act, and debt instruments issued by public-law institutions that are not capable of being subject to insolvency proceedings, do not count as debt instruments within the meaning of the first sentence.
(7) Subsection (6), first sentence, does not cover debt instruments for which it is agreed 1. that the amount of the repayment amount depends on the occurrence or non-occurrence of an event that was still uncertain at the time the debt instrument was issued, or that performance takes place otherwise than by payment of money, or 2. that the amount of the interest payment depends on the occurrence or non-occurrence of an event that was still uncertain at the time the debt instrument was issued, unless the amount of the interest payment depends exclusively on a fixed or market-standard variable reference rate and performance takes place by payment of money. The amount of the repayment amount or the interest payment amount is not deemed to depend on the occurrence or non-occurrence of an event that was still uncertain at the time the debt instrument was issued merely because the debt instrument is denominated in a currency other than the issuer's national currency, provided that the principal claim, the repayment, and the interest claim are denominated in the same currency.
(7a) Claims arising from own funds instruments within the meaning of Article 4(1), point 119, of Regulation (EU) No 575/2013 are satisfied only after all other claims. This also applies where these instruments are recognised as own funds only in part. Other claims within the meaning of the first sentence also include claims for which a contractual subordination has been agreed that puts them on an equal footing with claims arising from own funds instruments. In addition, holdings of 10 percent or less of the capital or voting rights in a subsidiary undertaking that are not owned by the parent undertaking are also deemed other claims, insofar as these holdings are not recognised as own funds instruments on the basis of a profit-and-loss transfer agreement. Claims arising from own funds instruments are satisfied in the following order of priority: 1. claims arising from own funds instruments with a contractual subordination clause that are eligible as Tier 2 instruments, 2. claims arising from own funds instruments with a contractual subordination clause that are eligible as Additional Tier 1 instruments, 3. claims arising from own funds instruments, with or without a contractual subordination clause, that are eligible as Common Equity Tier 1 instruments.
(8) The Federal Ministry of Finance is authorised to issue, by statutory instrument not requiring the consent of the Bundesrat, more detailed provisions on the characteristics of the debt instruments covered by the scope of subsection (7). The Federal Ministry of Finance may transfer the authorisation to issue the statutory instrument under the first sentence to the Federal Financial Supervisory Authority by statutory instrument.
(9) For debt instruments issued before 21 July 2018, section 46f(5) to (7) of the Banking Act, as in force until 20 July 2018, continues to apply. In insolvency proceedings, debt instruments issued before 21 July 2018 within the meaning of section 46f(6), first sentence, of the Banking Act, as in force until 20 July 2018, have the same rank as debt instruments within the meaning of subsection (6), first sentence.