Compulsory settlement
In insolvency law , the compulsory settlement refers to a judicial settlement between the debtor and his non-privileged creditors. In contrast to an out-of-court settlement, however, in a compulsory settlement after a majority decision by the creditors, the court replaces the lack of consent of the creditors' minority. For the minority, participation in the settlement therefore only comes about through judicial compulsion.
In Germany, the compulsory settlement was regulated in §§ 160 ff. Of the bankruptcy code of 1877. Since the insolvency law came into force in 1999, the term “compulsory settlement” is no longer used by law. However, the so-called insolvency plan and the debt settlement plan assume a similar function . In contrast to the compulsory settlement, the insolvency plan does not require the consent of the debtor and other parties besides the ordinary creditors can be involved.