Opinion of the German Federal Constitutional Court Concerning the Constitutional Complaints of Two Trustees in Bankruptcy

Second Panel, October 18, 1983 (1983)

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Opinion of the German Federal Constitutional Court Concerning the Constitutional Complaints of Two Trustees in Bankruptcy

Germany Federal Constitutional Court
Second Panel, October 18, 1983 (1983)

Facts

Two bankruptcy trustees (plaintiffs) faced a difficult question about how to treat claims for severance pay in a bankruptcy case. Corporate laws provided no guidance, but bankruptcy law prioritized employees for wages earned within the previous year. Severance pay was not wages earned within the previous year, so severance pay was placed sixth in priority classes in all other claims. However, the lead labor court, Bundesarbeitsgericht (BAG), applying current social policy and a constitutional provision stating that Germany was a democratic and social state, held that severance pay must be given priority even ahead of wages. Courts subsequently followed the BAG decision despite the conflict with codified bankruptcy law. The trustees sought the interpretation of the Germany Federal Constitutional Court.

Rule of Law

Issue

Holding and Reasoning (Per curiam)

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