Difference between insolvency administrator and insolvency monitor

An insolvency administrator and an insolvency monitor (Sachwalter) are both involved in handling an insolvency, but have different tasks and powers.

The insolvency administrator is a person appointed by the insolvency court to manage the assets of an insolvent company and to realise them in such a way that creditors are satisfied as far as possible. When the proceedings are opened, the right to manage and dispose of the company’s assets passes to the insolvency administrator (Section 80 of the German Insolvency Code). The administrator continues or closes down the business, decides on ongoing contracts and realises the assets.

The insolvency monitor, by contrast, is appointed in certain cases, such as Eigenverwaltung (debtor-in-possession management under Sections 270 et seq. of the German Insolvency Code), and has a different role from the insolvency administrator. The monitor supervises the proceedings and ensures that creditors’ rights are protected and that the proceedings are conducted in accordance with insolvency law. However, the insolvency monitor does not have the comprehensive powers of an insolvency administrator and acts rather as a kind of controller, responsible for ensuring that the Eigenverwaltung proceedings are conducted lawfully and properly.

In short, the insolvency administrator has a more active role in insolvency proceedings, while the insolvency monitor has a supervisory role and ensures that the proceedings comply with the law.