Subordination agreement (§ 39(2) InsO)

§ 39(2) InsO lets a creditor and debtor contractually rank a claim even lower than the claims already subordinated by law under § 39(1) InsO — such as shareholder loans. Unlike statutory subordination, a Rangrücktritt is voluntary and individually negotiated; it typically appears with shareholder loans, vendor loans, or other equity-like financing.

The precise wording is decisive in practice: only a „qualified” subordination — one that expressly equates the claim with retained equity and ranks it behind all creditors, including future ones — relieves the over-indebtedness balance sheet under § 19 InsO, per settled BGH case law. An insufficiently worded, „simple” subordination remains a liability that must still be recognised and does nothing to avoid over-indebtedness — a common pitfall in self-drafted shareholder-loan agreements.

For buyers, subordination matters in two situations: first, when acquiring a target with existing subordinated loans — the validity and qualification of the subordination language should be checked during due diligence, since a defective subordination can expose previously hidden over-indebtedness. Second, when using a vendor or shareholder loan to help finance the acquisition — without a valid subordination, such a loan immediately counts as ordinary debt and can burden the acquired business's turnaround case from day one.