Insolvency proceedings in self-administration offer companies the opportunity to carry out a reorganisation on their own. The management remains capable of acting, but is subject to the supervision of a court-appointed administrator. An advisor with insolvency experience supports the management in insolvency-specific tasks. As a rule, the aim is for the company to restructure itself within the framework of insolvency plan proceedings. Our restructuring experts have already successfully supported a large number of self-administration proceedings as advisors or court-appointed administrators.
To achieve this, we pull out all the stops. And you can be sure that we take a holistic view of your company. Especially when dealing with a crisis, it is important to know exactly where change is possible and makes good sense.
Certified restructuring advisors, lawyers, mediators, specialist lawyers, business economists and tax advisors as well as the back office supporting them are ready to answer your professional and administrative questions. This enables us to adapt flexibly and quickly to new challenges.
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The Act to Facilitate the Restructuring of Companies (Gesetz zur Erleichterung der Sanierung von Unternehmen - ESUG for short) offers companies the opportunity to pursue restructuring under their own responsibility with the help of self-administration proceedings. Self-administration proceedings (§ 270a of the German Insolvency Code - InsO) are insolvency proceedings in which the managing director ultimately assumes the tasks of an insolvency administrator under the supervision of a trustee and thus sets out the course of restructuring himself while taking into account the interests of creditors.
In self-administration proceedings, the managing director can manage his or her company (debtor) under his own responsibility and guided by the supervisor even after the opening of proceedings. He or she decides on all transactions that are part of the ordinary course of business. The managing director remains the sole contact person for customers, suppliers and contractual partners. Preliminary self-administration is not disclosed to the public and, unlike regular insolvency proceedings, therefore does not usually lead to a loss of reputation for the company or the debtor. Moreover, self-administration does not have the stigma of insolvency proceedings, even though it is ultimately tantamount to insolvency proceedings. The employment agency pays insolvency benefits for three months, so the company can be run without incurring personnel costs over this period if the application is filed early on. In addition, value-added tax does not have to be paid to the tax office during provisional self-administration.
Protective shield proceedings (§ 270b of the Insolvency Code - InsO) are only available to companies that are not yet insolvent. This must be demonstrated by means of a certificate from a tax advisor, auditor or lawyer. The protective shield procedure is designed for a shorter period of time, but is also usually more expensive than the self-administration procedure (§ 270a of the Insolvency Code - InsO).
In principle, managing directors of a company can file an application for self-administration themselves. However, the law places high demands on the application, making professional advice essential. Furthermore, the court will only order self-administration if the managing director is supported by an advisor (administrator) experienced in insolvency matters, as it is otherwise presumed that the order of self-administration will lead to disadvantages for the creditors.
In contrast to regular insolvency proceedings, the duration of self-administration proceedings is significantly shorter for the debtor. Well-prepared self-administration proceedings can be completed in only six to nine months.
The self-administration procedure or, in other words, insolvency in self-administration, offers the managing director the opportunity to reorganise his company under his own responsibility guided by the supervision of a trustee applying the instruments of the Insolvency Code and taking into account the interests of creditors. With professional preparation and support, the company (debtor) can emerge from the proceedings fully debt-free after only six to nine months. Insolvency in self-administration can therefore be the right restructuring instrument, especially for sound companies that find themselves in a crisis situation due to the Corona pandemic.