Principle of separation on insolvency of the Pfandbrief bank; deferral of maturity

(1) The assets entered in the cover registers, including the assets within the meaning of subsection (3), together with the minimum reserve held at the Deutsche Bundesbank insofar as it is attributable to Pfandbriefe, form asset pools separate from the general assets of the Pfandbrief bank that do not fall into the insolvency estate where insolvency proceedings are opened over the assets of the Pfandbrief bank (insolvency-remote assets). The claims of the Pfandbrief creditors are not affected by the opening of insolvency proceedings over the assets of the Pfandbrief bank; the right of the Pfandbrief creditors under subsection (6), fourth sentence remains preserved. These parts of the Pfandbrief bank named in the first and second sentences continue to exist, outside the insolvency proceedings, for each Pfandbrief class, as a Pfandbrief bank with limited business activity. The purpose of the respective Pfandbrief bank with limited business activity is the complete performance, in conformity with the contract, of the Pfandbrief liabilities and the proper administration of the insolvency-remote assets necessary for this. The management of the respective Pfandbrief bank with limited business activity is vested in the administrator appointed under section 31(1) and (2). The respective Pfandbrief bank with limited business activity is liable for the Pfandbrief liabilities and for the claims under subsection (3), third and fourth sentences and subsections (4) and (7), as well as for the liabilities arising from the administrator's transactions, with the associated insolvency-remote assets.
(2) In the case of subsection (1), an administrator must be appointed; section 31(1) and (2) applies to the procedure. On appointment, the right to administer, and to dispose of, all registered assets, including the assets within the meaning of subsection (3), passes to the administrator. Where the Pfandbrief bank has disposed of an asset entered in the cover register after the administrator's appointment, that disposition is invalid; sections 892 and 893 of the German Civil Code and sections 16 and 17 of the Act on Rights in Registered Ships and Ships under Construction, and sections 16 and 17 of the Act on Rights in Aircraft, remain unaffected. Where the Pfandbrief bank made a disposition on the day of the administrator's appointment, it is presumed to have made the disposition after the appointment. The administrator may, with effect for the respective Pfandbrief bank with limited business activity under subsection (1), enter into legal transactions insofar as this is necessary for the proper administration of the cover pools in the interest of the complete performance, in conformity with the contract, of the Pfandbrief liabilities. In particular, the administrator may procure liquid funds for the timely servicing of outstanding Pfandbriefe, or defer the maturity of interest and repayment payments, under the conditions of subsections (2a) and (2b). For this area of business, the administrator represents the Pfandbrief bank judicially and extrajudicially. The administrator is also, under the conditions named in the fifth sentence, entitled to take other action in relation to the administration of the cover pools, in particular to establish a new refinancing register within the meaning of sections 22a to 22o of the Banking Act and to make use of an existing refinancing register of the Pfandbrief bank. The limits under section 19(1), section 20(2), section 26(1) and section 26f(1) do not apply.
(2a) The administrator may defer the maturities of repayment payments under the conditions of subsection (2b). The administrator determines the duration of the deferral according to what is necessary under subsection (2b). In total, the duration of the deferral may not exceed a period of twelve months. Furthermore, the administrator may defer the maturities of interest payments falling due within one month after the administrator's appointment to the end of that one-month period. The administrator may exercise this power for all Pfandbriefe of an issue only uniformly, though wholly or proportionately. Where the administrator makes use of the possibility of deferring maturity for a Pfandbrief issue, the administrator must also defer, in at least the same proportion, the maturities of payments of other Pfandbrief liabilities falling due within that deferral period, in the proportion to which the originally earlier-maturing Pfandbrief issue remains unsatisfied at that time. Pfandbrief liabilities whose maturity would have occurred without the deferral remain, even during the period of their deferral, capable of being satisfied, on condition that the liabilities of an issue may be repaid only uniformly, though wholly or proportionately, and at most in the proportion in which originally earlier-maturing, but not yet fully repaid, Pfandbrief issues are satisfied at that time. Subject to differing agreements, deferred amounts bear interest, for the duration of the deferral of maturity, under the conditions applicable before the deferral. Deferred interest payments are in this regard deemed capital amounts. Subsection (6), first and second sentences remain unaffected.
(2b) The administrator may effect a deferral of maturity only where, at the time of the deferral, 1. the deferral is necessary to avoid the insolvency of the Pfandbrief bank with limited business activity, 2. the Pfandbrief bank with limited business activity is not over-indebted, and 3. there is reason to assume that the Pfandbrief bank with limited business activity will, in any event, be able to satisfy its then-maturing liabilities after the expiry of the maximum possible deferral period, having regard to further possibilities of deferral. For deferrals of maturity that do not exceed the period of one month after the administrator's appointment, the existence of these conditions is irrebuttably presumed.
(2c) The administrator must publish every deferral of maturity without delay, stating the affected Pfandbrief issues and the respective extent of the deferral, on the Pfandbrief bank's website, alongside the particulars published under section 28 for the relevant Pfandbrief class, in at least one supraregional gazette of record for stock exchange notices, and in the Federal Gazette. The first sentence applies accordingly to repayment payments made under subsection (2a), seventh sentence.
(3) The assets entered in the cover register are also subject to the administrator's power of administration and disposition insofar as, under section 5(1a), they are not intended for the cover of the Pfandbrief bank's Pfandbriefe. The administrator must in particular collect claims according to their maturity and realise mortgages when ripe for realisation. After deduction of appropriate administrative costs, the administrator pays over to the creditors of assets held in trust within the meaning of section 5(1a), fourth and fifth sentences, and otherwise to the insolvency estate, the share that would, for separated claims or individual mortgages, be attributable to the shares having regard to their rank. The creditors named in the third sentence and the insolvency administrator may each demand a rank-preserving division of claims or mortgages; the costs are borne by the creditors or, insofar as the insolvency administrator demands the division, by the insolvency estate.
(4) The insolvency administrator may at any time demand that registered assets that are not subject to trust administration, and that will evidently not be necessary for the cover of the respective Pfandbrief class, including the present-value and nominal-value overcollateralisation, be transferred by the administrator to the insolvency estate. Assets remaining after satisfaction of the Pfandbrief creditors and cover of the administrative costs must be handed over to the insolvency estate. A challenge by the insolvency administrator of the Pfandbrief bank against the administrator's actions is excluded.
(5) The court competent under section 31(11) may, on the application of BaFin, appoint an administrator even before the opening of insolvency proceedings over the assets of the Pfandbrief bank, where the conditions of section 46(1) of the Banking Act are satisfied. The provisions on the administrator appointed under subsection (2), first sentence apply accordingly to the legal position of that administrator.
(6) BaFin may take its own measures in relation to individual cover pools, under section 46 of the Banking Act accordingly. In the event of the insolvency or over-indebtedness of a cover pool, separate insolvency proceedings take place over the assets of the Pfandbrief bank with limited business activity; the application for the opening of insolvency proceedings may be made only by BaFin. Subsection (4) applies accordingly. In the insolvency proceedings over the remaining assets of the Pfandbrief bank, the Pfandbrief creditors may assert their claims only to the amount of the shortfall. Before the complete wind-down of the Pfandbrief bank with limited business activity, the insolvency administrator, in the insolvency proceedings over the assets of the Pfandbrief bank, must, in the case of an interim distribution, withhold appropriate amounts as provision for possible shortfall claims under the fourth sentence; a final distribution takes place only once it is established in what amount shortfall claims within the meaning of the fourth sentence can be asserted. In other respects, the provisions for creditors entitled to separate satisfaction apply accordingly, in particular section 52, first sentence, section 190(1) and (2) and section 192 of the Insolvency Code. Assets within the meaning of subsection (3) that belong to the insolvency estate of the Pfandbrief bank entitle, in the insolvency proceedings over the assets of the Pfandbrief bank with limited business activity, to segregation under section 47 of the Insolvency Code. Both the administrator and the insolvency administrator in the insolvency proceedings over the assets of the Pfandbrief bank with limited business activity are entitled to register the claims of the Pfandbrief creditors named in the fourth sentence in the insolvency proceedings over the assets of the Pfandbrief bank. The right of the Pfandbrief creditors to refuse or withdraw the registration remains unaffected.
(6a) In the insolvency proceedings over the assets of the Pfandbrief bank with limited business activity, the insolvency court should, on the application of BaFin, order self-administration by the administrator, unless it is to be expected, according to the circumstances, that the order will result in disadvantages for the creditors. Where such an order applied for by BaFin conflicts with the unanimous resolution of a provisional creditors' committee, where one exists, the court decides according to its duty-bound discretion on the basis of the facts communicated by BaFin, the administrator and the provisional creditors' committee. In the self-administration proceedings, the administrator within the meaning of subsection (2) (self-administrator) remains authorised to manage and represent the debtor Pfandbrief bank with limited business activity, insofar as the provisions of the Insolvency Code do not limit these powers. The position of the advisory board under section 31(6a) remains unaffected. Before the appointment of the administrator within the meaning of section 270f(2) of the Insolvency Code and the provisional administrator within the meaning of section 270b(1), first sentence of the Insolvency Code, BaFin must be heard. In addition to the persons entitled to apply under section 270e(1) nos. 4 to 5 and section 272(1) nos. 3 to 5 of the Insolvency Code, BaFin is also entitled to apply for the revocation of the order of self-administration or provisional self-administration. Section 270c(5), sections 270d, 270f(1) and sections 276a, 278(1) of the Insolvency Code do not apply.
(7) Creditors of claims from derivative transactions under section 4(3), and creditors of claims from legal transactions under subsection (2), fifth sentence, are treated as equal to Pfandbrief creditors. The administrator's power under subsection (2), sixth sentence in conjunction with subsection (2a) does not apply to the payment obligations from the transactions named in the first sentence.