Staying on course.
Even when times are tough.
How can a company that seems unmanoeuvrable be brought back on course? And with insolvency looming, how can it win back the trust of creditors? Not by transferring all decision-making powers from the “captain” to an insolvency administrator in standard insolvency proceedings. Companies fearful of just that eventuality wait far too long before filing for insolvency, which makes successful restructuring ever less likely.
The option of self-administration is designed for situations like these. In self-administration proceedings, management retains full power of disposal. The only difference is that an officer known as a ‘supervisor’ (Sachwalter) is appointed to work alongside them to protect the interests of the creditors and examine the company’s financial situation. Schultze & Braun helps clients to plan and take all action necessary to restore confidence in the company.
- Management retains power of disposal and ability to act (unlike in standard proceedings)
- Acts as an incentive to file an insolvency application as soon as possible (because there is no reason to fear loss of control)
- Supervisor builds trust, protects the interests of creditors only and examines the financial situation
- Simplifies and shortens proceedings, thus reducing costs
Why is an insolvency plan needed?
An insolvency plan – optional in standard self-administration proceedings, mandatory in protective shield proceedings – is drawn up by the various parties involved in the restructuring process. It must be agreed by the creditors and the court. This must be done within three months. Schultze & Braun advises and supports clients in the planning, preparation and agreement of insolvency plans including all necessary financial plans and attachments. The insolvency plan represents a compromise between the debtor company and its creditors. It outlines the specific steps to be taken to keep the company in operation and to restructure it.