Violation of obligations and claims for damages in connection with the licensing of the DFL and the insolvency application requirement

Attorney Christof Wieschemann and law clerk Jan Froehner, Bochum

Leading Repesented in Germany have General deals with the theme of “Withdrawal of license and liability issues in sport” on the occasion of the autumn meeting of the Konstanzer Arbeitskreis for Sports Law Association. The appearance of the eponymous band was responsible for an investigation intended for publication in the press, which specifically deals with questions of verifiability by the DFL licensing decision and with compensation obligations of the participants with each other for the authors. Away it considers, that the DFL, as well as those involved with each other for failures in the licensing procedure are liable and are liable for damages. Clubs have also such decisions in licensing court checked the way in which they have not been involved in. Thereby, a reversal of the burden of proof is competing applicants to help. The conflicting clauses in the licensing order (LO) and the license contract shall be invalid. Bankruptcy law provides the insolvency application duty even when the inability to compensate for slight liabilities. The publications of the last few days in connection with the BVB and statements made by Willi Lemke (Bremen) and Heribert Bruchhagen (Frankfurt) are the current reference.

I. situation
The decision on an applicant’s licence application has generally for competitors, their participation in the first because safe fulfillment of athletic qualifications or the 2nd Bundesliga because of safe non-fulfilment of the sporting qualifications have already been set, only losing importance. But, vital interests of the competitor are directly affected in the grey zone between ascent and descent. Is revoked the license of a sporty qualified participants during the season or for next season is not granted, so the applicant retires LO pursuant to § 10 of the League. In his rather than the table sixteenth in the League will remain. This was at the end of season 2003/2004 Eintracht Frankfurt, VfL Bochum after current table situation.
The licensing procedure of the League Association, which in turn uses the services of the DFL in the procedure (article 19 II of the Statute of the League Association), was largely withdrawn but so far judicial control by competitors. This stems from the regulations self-imposed by the League Association/DFL. Pursuant to section 11 II of licensing order only the candidates involved in the corresponding procedure but not entitled to the right of appeal against decisions of the DFL, other applicants.
You are looking for processes that have the lawfulness of a decision in favor of a competitor to the subject, so in vain. To do this, she also see great public attention in the Court from one core legislative swept July 2002 between the SpVgg Unterhaching, Eintracht Frankfurt and the League Association is no exception. Here Eintracht Frankfurt had enforced until 2002/2003 its own participation in the game operation of the 2nd Bundesliga for the season in the procedure before the Permanent Court of arbitration for associations and corporations of the license leagues in Stuttgart. Before the OLG Stuttgart, the SpVgg Unterhaching demanded repeal this arbitration in vain (with the aim of the own participation in competition), after she had previously also unsuccessfully sought provisional legal protection before the OLG Frankfurt. A review of the decision of the DFL took place only on the request of initially rejected applicant’s itself, while subject to the procedures operated by the SpVgg Unterhaching essentially was the review of the rules of procedure of the arbitration.
Also a court dealing with claims for damages in connection with the licensing procedures did not take place until now. Reason for this is that first and foremost by the parties themselves for effectively held rule of 3 sentence 2 of the license agreement, according to which, in particular claims for damages against League Association and DFL should be excluded, “unless a participant meadow after, that the damage intentionally or through gross negligence (…)” is is”.
The news of the last few days have revealed a liquidity gap according to own statements of the BVB up to then of almost 30 million euros which should be closed by a renovation, or better deferral concept the creditors agreed in the meantime. However it requires to final adoption of yet the approval of 75% of the 5600 shareholders of MOL IRIS Fund, which should explain them at the shareholder meeting on the 14.3.2005, a day before the end of the deadline for the licensing documentation to the DFL. According to the publicly-quoted content of the notification to the owner the BVB is still failed to fulfil his payment obligations (depending on the source of between 15 and 17 million annually) from the Treaty at least this year. That seems incompatible with the duties of the insolvency law.

II. legal situation
Against the effectiveness of the provisions of the licensing procedure, there are serious concerns. Recent case-law opened also a claim for damages against a club that has acquired the license not in a fair way.
A) legal control of the decisions of the DFL by a competitor
§ 11 II LO limited the right of scrutiny of the rejected association with respect to the license may have wrongly granted an other applicant only seemingly. The license granted in favour of another inevitably creates a legally significant reflex effect on the himself aspired license. In the area of the relegation ranks, clubs maintain always at the same time for the 1st and in the alternative to issue licenses to the 2nd Bundesliga. Is rejected the application for a licence to the 1st Bundesliga, so the applicant can contest unquestionably this decision, with the justification would have an other applicant dutiful discretion the license with the result deprived or must be denied, that rejected applicants can participate in his stead who play. Thus the license granted to a third party are also performed in the proceedings on the application for own incident.
B) liability for damages of the League Association / the DFL
Pursuant to the rule of 3 sentence 2 of the license agreement, a compensation obligation of the DFL appears to be excluded even if this makes pflichtwidrigen use under the forecast decision about the economic performance of a candidate for the future of the conferred discretion, E.g. to this for reasons that are outside of the process itself, to favor. However, this provision of a control based on the criteria established by the case-law will not withstand. In the preamble to the LO, the League Association described even the purpose of the procedure, namely among others to ensure the League game operation, to ensure the stability of the participants, to enhance the integrity of the competition and to build the credibility. All necessary auditing requirements may known as so-called cardinal obligations of the DFL, from which a “free drawing” is not possible. The DFL provides with competitive advantage, a club with disrespect of the licensing rules this obliged to pay damages.
(C) liability for damages a club for incorrect information 
Should prove that an applicant in the application, made erroneous information to obtain the license instead of an another competitor, he would be under § 280 I BGB liable for damages, a competitor to E.g. to replace of the loss of revenue of the 2nd to the 1st Bundesliga. This legal consequence simplifies the recent jurisprudence of the Federal Court of Justice to the European Cup home game, wherein the Supreme Court “Mitgliedschaftliche development and obligations of consideration of” among States, whose injury is obliged to pay damages.
D) burden of proof
The actual basis of appeal against a decision on the plaintive competitor was not involved, or a breach of duty as the basis of compensation proceedings appear initially only difficult to prove. However, we find a reversal of burden of proof in favour of the victim on many constellations with similar interests. This one has to prove only an objective breach of duty or at least an issue which indicated a breach of duty for typical flow of events, the right opponent has to prove his missing fault then.
E) Insolvenzrechtliche obligations
In the reorganization of bankruptcy/insolvency law to 1 January 1999 the legislator in the offence of section 17 has refused persistence of illiquidity InsO consciously on the previously existing features of materiality and he to avoid seeing a long-existing illiquidity as mere payment delays. Since then leads also the inability to pay a small part of the liabilities over two to three weeks, to the insolvency and insolvency application mandatory, whose injury to liability for damages and criminal liability of the organs.

III. conclusion
The figures even made by the BVB can recognize a loss and a liquidity gap at a large scale, where it is hard to imagine that their admission at the time of the licensing process was not recognizable in the previous year when careful examination. Critical observers cannot exclude a violation of the obligations of the BVB or the auditing requirements of DFL as the Foundation of license decision (if necessary also the missing deprivation of license) so. Both circumstances would lead to a liability for damages either of the BVB, of the League Association or the DFL for concerned candidates for example Eintracht Frankfurt.
The BVB KgAA is for own messages probably since the beginning of the year and until the 14.3.2005 without final agreement of deferral unable to comply with its obligations under the lease of the stadium. She expected a liquidity gap of nearly 30 million euros itself until the end of the season. The limits of materiality and the persistence of the insolvency law are exceeded should agree this information, according to the authors. This would have compulsory bankruptcy resulted.

Lawyer Wieschemann is mainly wirtschaftsrechtlich, but also sports law working in Bochum. He is a member of the Working Group of sports law of the German Bar Association since the year 1998 is located in the lawyer training program of the DAV in the firm Wieschemann Jan Froehner

Ed. by Prof. Dr. Peter W. Heermann LL.M boor, Stuttgart 2005 Sprint 2002, 213
NJW-RR 2003, 495 = Sprint 2002, 207
NJW-RR 2003, 498 = Sprint in 2003, 79
Limited active 12/1443 S BT pressure. 114
see the detailed evidence at Schulze Osterloh in Baumbach/Hueck, GmbHG, 17th Edition. 2000, § 64 REF. No. 5

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