Exclusivity (exclusivity period)
Time-limited commitment by the administrator not to negotiate with other bidders during the due diligence phase — usually granted only after a binding LOI, and rarely without something in return.
Exclusivity is the seller's (or administrator's) commitment not to negotiate with other interested parties for a fixed period — typically two to six weeks — so the buyer can complete due diligence and contract negotiation without competing time pressure. It's typically granted only after a Letter of Intent has been signed.
In insolvency, exclusivity is delicate for the administrator: they are statutorily bound to pursue the best possible realisation in the interest of the creditor body as a whole (§ 1 InsO), and risk excluding a better competing offer by committing to exclusivity too early. Practice is therefore either a very short, informal exclusivity window or — more commonly — a structured bidding process with no exclusivity at all, where several bidders negotiate in parallel right up to signing.
For buyers this means: in insolvency, exclusivity usually has to be earned — through a particularly credible, well-financed offer (proof of funds, few conditions) or through early contact before the formal bidding process starts. Without that, competitive pressure persists all the way to closing.
Related terms
- → Bidding process (Bieterverfahren)— Structured, usually two-round investor process the administrator runs to compare several p…
- → Letter of Intent (LoI)— Non-binding written statement of intent from a prospective buyer to the administrator, set…
- → Due diligence (red-flag review)— Systematic review of the target before the purchase decision. In insolvency, usually a com…
- → Distressed M&A— Corporate acquisitions in crisis or insolvency contexts. Characterised by compressed timel…