Use of Rents and Leases in the Context of a Composition by Assignment of Assets

Facts

In the context of a composition by assignment of assets, the pledge within the meaning of Art. 806 para. 1 CC also includes rents or leases that have accrued since the approval of the composition until the time of realization. The Konolfingen Savings Bank obtained that the rents collected during the liquidation proceedings be used as a priority to cover its claim secured by a mortgage, rather than being allocated to the bankruptcy estate.

Considerations

According to Art. 806 para. 1 CC, the pledge also extends to claims for rents or leases accrued since the commencement of enforcement proceedings for the realization of the real estate pledge or since the opening of the debtor's bankruptcy until the realization. Although the text of this provision does not expressly mention the composition by assignment of assets, the Court considers that this extension of the pledge also applies in this case.

Indeed, the composition by assignment of assets, like bankruptcy, constitutes a general execution of the debtor's assets. There is therefore no reason to subordinate the extension of the pledge to rent claims to an initiative by the pledgee, as is the case in enforcement…