Realization of the Real Estate Pledge in the Context of a Suspended Bankruptcy Due to Lack of Assets

Facts

The Debt Enforcement and Bankruptcy Chamber of the Federal Tribunal has been seized with an appeal against a decision of the Cantonal Supervisory Commission regarding a conflict between two requests for the realization of a real estate pledge following the suspension of the bankruptcy of a company due to lack of assets. Company X. was the subject of an enforcement proceeding for the realization of a real estate pledge initiated by creditor [Y. SA] before the opening of X.'s bankruptcy in 2001. After the suspension of X.'s bankruptcy due to lack of assets in 2003, creditor [Y. SA] requested the reactivation of its enforcement proceeding for the realization of the pledge under Art. 230(4) DEBA. At the same time, the cantonal tax administration, beneficiary of a legal mortgage, requested the application of the procedure under Art. 230a(2) DEBA for the realization of the pledge.

Considerations

The Federal Court ruled that when the bankruptcy estate includes encumbered assets, the suspension of the bankruptcy due to lack of assets does not necessarily terminate the proceedings. The bankruptcy office remains competent to ex officio open and manage the specific cascade liquidation procedure provided for in Art. 230a(2-4) DEBA. If a pledgee creditor requests the realization of their pledge in accordance with Art. 230a(2) DEBA, the…