The insolvency plan procedure is a type of insolvency process that differs from the usual methods employed. In it, individual “tailored” regulations can be laid down for solving the crisis in which a company finds itself. As a result, the legal entity can be retained and the main emphasis can be placed on restructuring the insolvent company.
In the final analysis, the objective here is an agreement between the insolvent company and all its creditors. The creditors must be convinced that they are better off with an insolvency plan procedure than if the company were broken up. The parties can reach agreements, especially regarding the preservation and continuation in business of the company, that deviate from customary insolvency law. The outlined continuation of the company is based on a concept of how to turn it around. Once the insolvency plan has been accepted by the creditors, the insolvency court must confirm it. Once the plan has obtained legal force, the insolvency proceedings are cancelled. The procedure thus offers opportunities to all parties concerned: The debtor company is given the chance to re-structure itself and to make a “new business start”, and the creditors are given the possibility that their claims will be better satisfied and that they will be able to work together with the restructured company in the future.
Because of our many years of experience in implementing insolvency plan procedures, we examine the preconditions for successfully putting a plan in place. At Buchalik Brömmekamp Rechtsanwälte Steuerberater we offer comprehensive consulting services on legal matters, in particular those involving commercial, labour and tax law. Buchalik Brömmekamp Unternehmensberatung analyses the operational and fiscal restructuring measures and decides whether the company is capable of being turned around and whether it is worth doing so. By using our own turnaround experts as Chief Restructuring Officers (CRO) we restore confidence in the management of the company and can convince creditors to participate in turning the company around. The complexity of the insolvency plan procedure is enormous, making it necessary to take account of economic and legal aspects and also project management experience has to be deployed. Debtors, creditors as well as insolvency administrators would therefore be well advised to bring in experts from Buchalik Brömmekamp at an early stage in the process.