The order of the day – examine the risk of loss of pension benefits
Directors, as well as other board members or self-employed agents, face the complete loss of their retirement benefits, if they were secured through ineffective trust arrangements. The authors strongly advise an early check to take corrective action. Red.
Trust assets are unprotected in the event of the trustee’s insolvency. The Federal Court of Justice already pointed this out ten years ago. This has fatal consequences. If the trustee becomes insolvent, the employer will regularly not be able to demand that the trustee’s insolvency administrator segregate the available collateral. Instead, the employers as trustors must file existing claims in the normal way in the insolvency table.
New own rights
The reason for this is that the trustee acquires new rights of his own for the employer by paying insurance premiums or purchasing investments. However, this acquired trust asset is not a so-called surrogate, i.e. it is no longer the asset which the trustee originally once received directly from the employer as trustor. The employer then merely has a normal claim under the law of obligations against the trustee (BGH, judgement of 18 July 2002, ref.: IX ZR 264/01). If insolvency or bankruptcy protection were important, a trust model would not normally be required, but in rem security, for example by way of pledge, irrevocable subscription right or assignment.
No protection in the event of enforcement
against the settlor Any creditor who has a title (for example, a judgment) against an employer/trustee may have execution levied against the trustee, by way of attachment and transfer order, even without his own title. The claim of the trustor/employer against the trustee arising from the trust relationship is then seized by the court, for example the (possibly future) statutory claims under sections 667, 812 of the German Civil Code (Bürgerliches Gesetzbuch – BGB) for the surrender of what has been obtained or the retransfer of the trust assets (Federal Court of Justice (Bundesgerichtshof – BGH), decision of 22 April 2010, ref. no.: VII ZB 15/09). But that’s not all: in April of this year, the Federal Court of Justice (BGH) ruled that each acceptance and forwarding of money is contestable in its own right. In the judgment of 26. April 2012, Ref.: IX ZR 74/11, states: “A disinterested trustee is subject to avoidance with intent if, after knowledge of the debtor’s insolvency, he forwards sums of money left to him in accordance with the agreement to certain creditors of the debtor who are to be satisfied preferentially.” This allows insolvency administrators to declare avoidance for ten years. Creditors also have this right of avoidance, for example if the opening of insolvency proceedings is refused for lack of assets.
Double trust voidable …
In addition, the transfer of assets to “disinterested administrative trustees” (e.g. a CTA) is already disadvantageous for creditors and can regularly be challenged. According to the Federal Court of Justice: “Consequently, it must be maintained that even the surrender of funds to a disinterested administrative trustee of the debtor is disadvantageous for the debtor’s creditors.” Trust and double trust models thus prove to be a clumsy deception about the fact that they do not protect the assets in the event of insolvency, but actually have the opposite effect – in that these pension assets become the “easy prey” for any insolvency administrator.
… and without protective function
Even if the transfer of assets to a trustee subjectively (from the point of view of an employer/trustee) possibly (dolus eventualis) also merely indirectly serves to disadvantage creditors and this is accepted as a mere presumed consequence, it is subject to the ten-year avoidance period if the trustee is aware of it, § 3 I AnfG, § 133 I InsO. This disadvantage to creditors is, among other things, the declared purpose of the contract, both according to the CTA advertising and according to the contents of usual CTA contracts. It is not decisive that the trustee was already aware, for example, of impending insolvency when the trust assets were transferred. It is already sufficient that the CTA trustee knew “in the case of security” or “in the case of disturbance” that an insolvency case already existed at that time and that therefore his “instruction-based, (previously contractually) agreed payment of money to allegedly secured employees” disadvantaged the other creditors.
The Insolvency Code protects both old creditors and future new creditors, so that any fiduciary model is condemned to failure from the outset . Already the laying down of declarations of knowledge and motives concerning a protection of assets for employees, as usual in CTA models “in the event of insolvency as an open motive of the security trust”, leads to the fact that on the one hand the transfer of assets to trustee and/or double trustee is contestable for ten years in each case, and on the other hand also any payment “in the event of security”, because then the trustee knows that other creditors “by his instruction Payouts to employees contractually preferred by CTA” are disadvantaged. Such assignments to fiduciaries prove to be unconscionable from the outset.
Beneficiaries shall be jointly and severally liable .
In its second guiding principle, the BGH states from: “A disinterested trustee who disburses voidably obtained funds of the debtor to his creditor in accordance with his instructions is obliged to compensate for the value, (recently) without invoking a lapse of the enrichment. to be able to”. The trustee model makes the trustee liable to the insolvency administrator. beneficiary of the pension – since he was unlawfully given preferential satisfaction as a creditor – and the trustee as joint and several debtors. In the internal relationship, the pension beneficiary is liable to the trustee. If a group CTA trustee has to “pay twice” after the funds are paid to the employee, the trust assets of the other employers/trustees are also put at risk of misappropriation or enforcement. The remaining employers/trustees will feel deceived in retrospect about the content of the purported security provided by CTA/trustee. This is because if the CTA trustee then becomes insolvent itself, even the solvent employers/trustees regularly expect only a “bankruptcy rate” when it comes to the return of their trust assets.
In this regard, the BGH 2012: Even a trustee acting in good faith is liable alongside beneficiaries from the opening of proceedings – quote: “With the opening of insolvency proceedings against the assets of the trustee (employer), the trust agreement expires in accordance with §§ 115, 116 InsO and the trust assets fall economically into the insolvency estate.” If the bona fide, unsuspecting trustee pays on the instructions of the settlor/employer after the opening of the insolvency proceedings, the claim of the insolvency administrator to the trust assets shall thereby lapse. against the trustee is not, the trustee may have to pay twice, because the instruction of the trustee/employer is ineffective, § 81 InsO, as the BGH states (judgment of 12 July 2012, ref.: IX ZR 213/11).
If the insolvency administrator subsequently decides to approve this ineffective disposition of trust property in order to spare the disinterested administrative trustee, the insolvency administrator may also seek reimbursement from a bona fide recipient of trust property. This is because the recipient of the payment is legally considered to be a non-entitled party, so that good faith is not even relevant, § 816 II BGB.
For representatives of corporate bodies without sufficient expertise of their own, for example in the field of occupational pensions, there is an obligation to delegate to experts, without thereby prohibiting legal advice . Due to the personal liability of board members and managing directors in the event of organisational culpability, the work results of external experts must be subjected to a careful plausibility check, as the Federal Court of Justice (BGH) stated (ruling of 20 September 2011, Ref.: II ZR 234/09).
In its ruling of 19 June 2012, Ref.: II ZR 243/11, the BGH goes one step further by assessing it as organisational culpability with a reversal of the burden of proof if the executive bodies of an AG or GmbH do not continuously monitor the economic situation and include and assess provisions not included in business management evaluations . Coverage gaps in the occupational pension system, but also dubious “trust models in the occupational pension system”, can objectively turn the economic situation upside down. Even with the best of intentions, organisational negligence leads to personal liability of the executive body, in which case the manager’s liability insurance is usually exempt from payment.
Johannes Fiala, Peter A. Schramm, Dieter Olejar
Courtesy of Year-End Check 2012/2013
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About the author
Dr. Johannes Fiala
Dr. Johannes Fiala has been working for more than 25 years as a lawyer and attorney with his own law firm in Munich. He is intensively involved in real estate, financial law, tax and insurance law. The numerous stages of his professional career enable him to provide his clients with comprehensive advice and to act as a lawyer in the event of disputes. »More about Dr. Johannes Fiala
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