§ 613a BGB in an insolvency asset deal: do I really inherit the entire workforce?

§ 613a BGB governs the transfer of a business: when a business or part of a business passes to a new owner by legal transaction, that owner enters into the existing employment relationships by operation of law. An asset deal in which you take over the going concern — customers, machinery, brand, an established team — is the classic case. You cannot simply “cherry-pick” the workforce by buying only the assets and ignoring the contracts.

The Federal Labour Court (BAG) has consistently held that § 613a BGB also applies in opened insolvency proceedings. The administrator cannot sell the business “free of employees”. Whoever takes over the operating business in principle takes over the employment relationships of the staff assigned to that business or part-business.

The key distinction: § 613a only applies where an economic entity retains its identity — i.e. a viable whole transfers, not just isolated assets torn out of context. If you buy only machines and inventory out of an already shut-down insolvency with no continuation, there is usually no transfer of business — and no employment relationships pass over. Whether a transfer exists is an overall assessment of the individual case, not a label on the contract.

This is the real reason an insolvency purchase beats a normal asset deal. Outside insolvency, § 613a(2) BGB makes the acquirer jointly liable alongside the seller for claims that arose before the transfer. In insolvency, settled BAG case law breaks this continuing liability: the acquirer is not liable for employee claims that arose before the opening of proceedings.

Concretely: back wages, accrued holiday and bonus entitlements, severance claims and the portion of occupational pensions earned up to opening remain insolvency claims against the estate — not your liability as buyer. For occupational pensions the Pension Protection Association (PSV) additionally steps in for entitlements earned before opening. The acquirer therefore takes on the employment relationships only “going forward” — from the transfer onward.

Practical consequence: the transfer is typically structured to take effect after the opening of proceedings (übertragende Sanierung / transfer restructuring), because only then does the insolvency-law liability privilege apply in full. Signing during the preliminary phase with closing after opening is common practice. Taking over too early, outside this framework, forfeits the very advantage you went into insolvency for.

You do not have to take over the business with a full crew. Dismissals solely because of the transfer are void under § 613a(4) BGB — but headcount reductions based on a genuine acquirer concept (Erwerberkonzept) are permitted. Where, before the transfer, there is a robust business concept requiring fewer staff on operational grounds, the matching dismissals can be valid.

The sharpest instrument is the reconciliation of interests with a name list under § 125 InsO: if administrator and works council agree on a list of employees to be dismissed, the dismissals are presumed operationally justified and the social selection is only reviewable for gross error. That substantially lowers litigation risk and makes headcount predictable for the acquirer. § 123 InsO additionally caps the volume of the social plan in insolvency.

A second building block is the transfer company (Transfergesellschaft / BQG): employees who are not needed move, before the transfer and via a tripartite agreement, voluntarily into a fixed-term transfer company — so they precisely do not pass to you under § 613a. This lets you take over the key people with precision, while the rest are caught socially and outside your liability. Both routes require a cooperative administrator and a works council — one more reason to run the administrator outreach early and cleanly.

Every affected employee may object to the transfer of their employment within one month (§ 613a(6) BGB). The period only starts running after proper information under § 613a(5) BGB. If that information is defective or incomplete, the period does not start — objections remain possible even months later. For you as buyer, clean information coordinated with the administrator is therefore not a formality but risk control: it determines whether you have planning certainty over the transferring crew.

If an employee objects, their employment stays with the insolvent seller — they do not pass to you, but are usually dismissed by the administrator for lack of work. For key people you want to keep, early, personal engagement pays off.

For due diligence this means concretely: (1) which employees are assigned to the part-business being acquired? (2) what are the ongoing personnel costs from the transfer onward — and which claims fall away as pre-opening liabilities? (3) is there already a reconciliation of interests / name list or a transfer company, and does the planned headcount fit your acquirer concept? (4) are there pension promises, collective-bargaining coverage, works agreements? These points belong before any offer — our Asset Deal vs. Share Deal comparison places them in the overall structure, and the definition of § 613a BGB summarises the rule compactly.