First the decision, then the procedure.
Out-of-court restructuring, StaRUG (the German Act on the Stabilisation and Restructuring Framework for Businesses), Eigenverwaltung (debtor-in-possession management under Sections 270 et seq. of the German Insolvency Code), regular proceedings, a sale: there are usually several routes for the same starting position, and they differ considerably in duration, cost, publicity and in how much of the substance remains at the end. The choice is made once and is difficult to correct afterwards.
We compare the options for your specific situation, run the numbers on each and state which we consider viable and why. With an open mind, as we have no interest of our own in any particular route.
What you gain
- 1A decision based on figures. Not on gut feeling, and not on whichever route the first adviser happens to offer.
- 2You know the deadlines. Some routes are only open for a narrow window of time. Anyone who misses it no longer has the choice.
- 3Clarity about the consequences for you personally. Liability, guarantees, shareholder loans: each option affects management and shareholders differently.
- 4A decision paper for shareholders and the advisory board. In writing, traceable, with alternatives and a recommendation.
- 5No wasted lead time. What we build for the review, that is planning, figures and a list of measures, is exactly what the chosen route needs afterwards.
Five questions, in this order
How much time is left? The liquidity forecast determines everything else. It shows whether weeks or months remain, and therefore which routes are still within reach.
Is there a ground for insolvency? Illiquidity (Sec. 17 InsO), imminent illiquidity (Sec. 18 InsO) or over-indebtedness (Sec. 19 InsO) are not assessments, but defined states with clear legal consequences. Examining them is not a formality: the answer determines whether there is a duty to file for insolvency and from when management is personally liable.
Is the business viable? Is the business competitive at its core and only needs to clear up the past, or is the business model itself the problem? In the second case, no procedure will help, only a reorganisation or a sale.
What is the creditor structure? A few large creditors who are able to negotiate lead to different routes than a widely dispersed structure. Anyone who cannot obtain the required majorities cannot conduct StaRUG proceedings.
What do the shareholders want? Continue, sell, hand over: this is not a question of restructuring theory, but an entrepreneurial decision. It belongs at the beginning, not at the end.
What suits which situation
| Route | Suitable if | Limitation |
|---|---|---|
| Out-of-court restructuring | the parties involved cooperate and the legacy burdens are manageable | a single holdout is enough to block it |
| StaRUG | illiquidity is imminent but has not yet occurred, and majorities are achievable | no workforce measures, no insolvency benefit (Insolvenzgeld) |
| Eigenverwaltung | deeper intervention is needed and there is time to prepare | insolvency proceedings with everything they entail |
| Regular proceedings | preparation is lacking or time has run out | management gives up control |
| Sale / distressed M&A | the company is better placed under a different roof | requires lead time and a business that is still operating |
The right answer is often not an either-or decision. A sale can be prepared in parallel with proceedings, and preparing proceedings often improves the negotiating position outside them. This dual-track approach is intentional, as it keeps up the pressure on both sides.
The result
A written decision paper, prepared within one to three weeks, depending on the data available and the urgency. It contains:
In urgent cases, we first provide an assessment of deadlines and filing obligations, followed by the full paper. The question of whether a duty to file is running cannot wait three weeks.
