But what does Eigenverwaltung actually mean?

Eigenverwaltung (debtor-in-possession management under Sections 270 et seq. of the German Insolvency Code) is a special procedure in insolvency law that gives companies in economic difficulty the chance to keep control of their business. It allows financial problems to be solved under the company’s own management, while a neutral expert, the insolvency monitor (Sachwalter), supervises the process.

How does Eigenverwaltung work?

Unlike classic insolvency, in which an insolvency administrator runs the company, management remains in office in Eigenverwaltung. It is supported by an insolvency monitor, who ensures that creditors’ rights are protected. Together, a restructuring plan is developed that restructures the debts and enables long-term stability.

The advantages of Eigenverwaltung:

• Preserving independence: management remains able to act and can contribute its entrepreneurial expertise to the restructuring process.
• Lower costs: as no insolvency administrator is needed, the costs of the proceedings can be reduced.
• Quick implementation: stabilisation measures can be taken swiftly, often within a few months.
• Protection against enforcement: during the proceedings, companies are protected against attachments and other enforcement measures.
• Continued operations: the business can be continued without major interruptions.

A practical example:

A medium-sized mechanical engineering company specialising in precision components for the automotive industry gets into financial difficulty when a major customer suddenly drops out. Despite the crisis, the company has a functioning business model and a loyal customer base. Management decides on proceedings in Eigenverwaltung in order to restructure its debts and open up new markets. During the restructuring phase, the business can continue to operate, and important investments in innovation are not stopped. Management is supported by an insolvency monitor, who supervises the process.

Our role (Worstbrock-Group):

The Worstbrock-Group supports companies in Eigenverwaltung with sound commercial expertise and practical advice. We analyse the financial situation, draw up restructuring concepts and coordinate negotiations with creditors. With more than 30 years of experience, we ensure that companies are not only stabilised during the restructuring phase, but also positioned for the future.

Summary:

Eigenverwaltung is a suitable solution for companies that want to keep their management and at the same time improve their economic situation. With the Worstbrock-Group at your side, you gain the support you need to master this challenge.