Constitution of the bridge institution

(1) A legal entity may be a bridge institution only where 1. its shares are held, in whole or in part, by the resolution authority or another public body, 2. it is controlled by the resolution authority on the basis of company-law, contractual, or sovereign means of influence, and 3. it was established as a bridge institution for the purposes of section 107(1), point 1, letter b.
(2) The resolution authority's consent is required for 1. the partnership agreement or articles of association, the registration of the company, the formation report, and the formation audit, 2. the appointment of the managers and of the members of the supervisory or administrative body of the bridge institution, 3. the allocation of responsibilities among the respective managers, and the remuneration arrangements applicable to them, and 4. the business organisation within the meaning of section 25a of the Banking Act. The resolution authority may withhold its consent where this furthers the achievement of the resolution objectives.
(3) The bridge institution must be operated with the aim of 1. maintaining access to critical functions, and 2. selling the bridge institution, or its assets, rights, and liabilities, to one or more private acquirers, on reasonable terms, within the period under subsection (4), first sentence, point 3, as extended where applicable.
(4) The resolution authority must determine that a legal entity ceases to be a bridge institution where 1. the conditions under subsection (1), points 1 and 2, are no longer satisfied, 2. all, or substantially all, of the assets, rights, or liabilities of the bridge institution are sold to a third party, or 3. the results referred to in points 1 and 2 do not occur within two years of the date on which the last transfer under section 107(1), point 1, letter b, to the bridge institution took place. The resolution authority may extend the period under the first sentence, point 3, more than once, each time by one year, where it has grounds to believe that the extension would better achieve one of the results referred to in the first sentence, points 1 and 2, or where an extension is necessary to ensure the continuity of essential banking or financial services. The decision under the second sentence must be reasoned and must include a detailed assessment of the situation, including market conditions and prospects, justifying the decision.
(5) Where the resolution authority determines, under subsection (4), first sentence, points 2 or 3, that a legal entity ceases to be a bridge institution, the resolution authority, where grounds for insolvency exist, files, without delay, an application for the opening of insolvency proceedings over the remaining assets of the bridge institution. Section 46b(1), fourth sentence, of the Banking Act applies, on the understanding that the resolution authority takes the place of the Federal Financial Supervisory Authority. Where, in the case under the first sentence, no grounds for insolvency exist, the resolution authority arranges for the liquidation of the bridge institution.