The German Insolvency Act says an insolvency administrator may sell a "moveable object" on which a right to separate satisfaction (Absonderungsrecht) exists if such object is in his possession. The right to separate satisfaction entitles creditors with such a right to be satisfied ahead of all other creditors from the proceeds of selling a separate pool of assets within the insolvent estate.
It depends on whether the debtor had the object in his possession when insolvency proceedings opened. Until now it has been unclear whether "possession" included leases.
In a recent decision the German Federal Court addressed this.
This decision makes insolvency administrators’ realisation rights more difficult, as in each case they must check the indirect possession position of the debtor using the court's criteria prior to realisation. However, banks of leasing companies will welcome this decision, as it increases the value of their security and strengthens their position in the event of realization.
Case: IX ZR 295/16