I’ve seen that in multiple founding contracts for private companies and no lawyer ever flagged that. I doubt a judge will collect it. The mechanism is usually c

I’ve seen that in multiple founding contracts for private companies and no lawyer ever flagged that. I doubt a judge will collect it. The mechanism is usually called Einziehung der Geschäftsanteile, basically the remaining shareholders can force-collect the shares of the bankrupt shareholder. A suitable compensation is required. See for example this random reference (German) https://kuhlen-berlin.de/glossar/einziehung-von-gesch%C3%A4ftsanteilen-der-gmbh https://kuhlen-berlin.de/glossar/einziehung-von-gesch%C3%A4f... The shares immediately loose all voting rights in that process. The reason is to prevent a potentially hostile party from entering the shareholder group. Edit: Here’s a better reference with an example what such a clause in the companies charter could look like: https://gmbhg.kommentar.de/Abschnitt-2/Einziehung-von-Geschaeftsanteilen https://gmbhg.kommentar.de/Abschnitt-2/Einziehung-von-Gescha...