What restructuring options exist for a financially distressed GmbH in Germany besides filing for insolvency?

Dear Sir/Madam,

Thank you for reaching out with your question. Schutzschirmverfahren (protective shield proceedings) and Eigenverwaltung (self-administration) are indeed options for German GmbHs facing cash flow problems and overdue invoices, but they come with specific prerequisites, costs, and risks.

For Schutzschirmverfahren, your company must not yet be insolvent, but there must be imminent risk of insolvency or over-indebtedness. The procedure allows you to negotiate with creditors and develop a restructuring plan under court supervision, typically for up to three months. The main requirements include:

Not being already insolvent, but facing impending insolvency or over-indebtedness.

Demonstrating that restructuring is still feasible.

A professional assessment (often by a restructuring lawyer or accountant) confirming the above points.​

Costs can include court fees, fees for the court-appointed trustee (Sachwalter), and potentially fees for professional advisors. Court fees depend on the amount in dispute and can range from a few hundred to several thousand euros. Legal and restructuring advisor fees will depend on the complexity of your case.​

Potential risks include:

If restructuring fails, the process may lead to full insolvency proceedings.

The company’s management remains responsible for decision-making, but with increased scrutiny and obligations to creditors and the court.

Delays or missteps could lead to personal liability for directors if insolvency filing is unduly postponed.​

Hiring a restructuring lawyer is highly recommended. The process is legally complex, and a specialized lawyer will ensure you meet all legal requirements, help prepare the necessary documentation, negotiate with creditors, and minimize personal and business risks.​

If you wish, I can provide you with detailed text-based guidance and advice via WhatsApp, helping you understand your options and next steps with minimal cost.

Please let me know if you would like to discuss further.

Best regards,