Protective shield proceedings

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The protective shield procedure ( Section 270b of the Insolvency Code ) is a special type of procedure under German insolvency law . It combines provisional self-administration with the aim of submitting an insolvency plan at an early stage in order to facilitate the restructuring of companies . The protective shield proceedings - as well as the provisional self-administration regulated in Section 270a of the Insolvency Code - were incorporated into the insolvency code on March 1, 2012 by the Act to Further Facilitate the Reorganization of Companies (ESUG), whereby the law is partly based on an EU regulation from the Year 2000 based. Although self-administration is of considerable importance, especially in larger insolvencies, the protective shield procedure only plays a subordinate role in practice.

Procedure

The protective shield procedure is a special variant of self-administration with the aim of submitting an insolvency plan. In order to be able to make use of the protective shield procedure, an early application and well-founded justification by the company is required. The main criteria are the company's liquidity and the general prospect of successful restructuring.

As a major difference to regular insolvency proceedings or normal self- administration , the administrator in protective shield proceedings is largely freely selectable by the company. A refusal by the court can only take place on the basis of a lack of suitability, for example a lack of independence or a complete lack of experience.

At the end of the protective shield proceedings, there is either the timely submission of the insolvency plan or the cancellation or termination of the protective shield proceedings . In both cases, the bankruptcy court decides whether to open insolvency proceedings.

requirements

In addition to an application for a protective shield, the insolvency regulation specifies the following entry requirements for an insolvent company's access to protective shield proceedings (see Section 270b (1) of the Insolvency Regulation):

  • In the time of application, only the lie insolvency reasons of impending insolvency and / or excessive debt but not already insolvent before the insolvent company.
  • The insolvent company has applied for self-administration .
  • The planned renovation must not be obviously hopeless.
  • With the application, a reasoned certificate from a tax advisor, auditor or lawyer with experience in insolvency matters or a person with comparable qualifications is submitted, which shows that there is an impending insolvency or over-indebtedness , but not insolvency , and the desired restructuring is not obviously futile.

The non-existence of insolvency and, above all, the certification of an insolvency expert, which requires a certain lead time, represent high hurdles in practice, which ultimately contributes to the fact that many companies in need of restructuring apply for (simple) provisional self-administration according to Section 270a of the Insolvency Code as a type of procedure instead of the protective shield procedure.

Legal effects

If the prerequisites are met, the insolvency court determines the deadline of up to three months requested by the insolvent company for the submission of an insolvency plan. Insolvency proceedings may not be opened within this period. In addition, the bankruptcy court orders the provisional self-administration and appoints a provisional administrator.

The protective shield procedure offers the following advantages or additional legal effects for insolvent companies:

  • The insolvency court has to appoint a provisional administrator proposed by the insolvent company, unless the proposed person is obviously unsuitable (cf. § 270b (2) of the Insolvency Code).
  • At the request of the insolvent company, the insolvency court has to order that the company is authorized to establish mass liabilities (Section 270b (3) of the Insolvency Code).
  • At the request of the insolvent company, the insolvency court orders a freeze on enforcement (Section 270b (2) of the Insolvency Code).

Creditors' committee

In addition, the insolvency court must set up a provisional creditors' committee in accordance with Section 21 (2) number 1a if the insolvent company met at least two of the three following criteria in the previous financial year:

  1. at least 6,000,000 euros balance sheet total after deduction of a deficit shown on the assets side within the meaning of Section 268 (3) of the Commercial Code;
  2. at least 12,000,000 euros in sales in the twelve months prior to the reporting date;
  3. an annual average of at least 50 employees.

literature

  • Stephan Kolmann: Schutzschirmverfahren (=  ZIP practice book . Volume 2 ). RWS-Verlag, Cologne 2014, ISBN 978-3-8145-8178-1 .
  • Markus Lepine: The protective shield procedure in German and Brazilian law (=  series of publications on uniform international law and comparative law ). Dr. Kovač, Hamburg 2014, ISBN 978-3-8300-7645-2 (also Cologne, Univ., Diss. 2013).
  • Christian Meyland: The renovation certificate and its issuer according to § 270b InsO. An investigation into the special requirements of the protective shield procedure with critical consideration of IDW standards (=  insolvency law in research and practice ). Dr. Kovač, Hamburg 2018, ISBN 978-3-8300-9765-5 (also Kiel, Univ., Diss. 2017).

Individual evidence

  1. ↑ Improved opportunities for corporate restructuring - press release ( memento of March 20, 2013 in the Internet Archive ). Federal Ministry of Justice. Retrieved October 10, 2013.
  2. ↑ Report from the Commission to the European Parliament, the Council and the European Economic and Social Committee on the application of Regulation (EC) No. 1346/2000 of the Council of 29 May 2000 on insolvency proceedings / * COM / 2012/0743 final * /
  3. ^ Henryk Hielscher: Insolvency Law: Company Objective: Resurrection. In: Wirtschaftswoche . May 5, 2018, accessed June 9, 2019 .
  4. ↑ Lepine, Markus: The protective shield procedure in German and Brazilian law - a comparative law
  5. ↑ Improved opportunities for corporate restructuring - press release ( memento of March 20, 2013 in the Internet Archive ). Federal Ministry of Justice. Retrieved October 10, 2013.
  6. ↑ § 22a InsO, Federal Ministry of Justice. Retrieved January 21, 2018.