Protection from the creditors
In the course of self-management, you can now break down unlucrative contracts in order to gain a little liquidity or to continue or expand already existing lucrative contracts.
During this period (a maximum of three months), you are protected against the creditor's enforcement. Within the framework of this protective screen, you can promote the rehabilitation in peace.
Own management by the creditors' committee
The second way to self-administration would be, as already stated, that the constituent creditors' committee requests or approves self-government before the court. Then the court has to follow this recommendation, as obviously no creditor disadvantage will occur.
Conclusion: Self-administration generally does Sense, because on the one hand process costs are saved and on the other hand you are the economic expert in your business area. On the other hand, if you are a creditor, participation in the creditors' committee offers several advantages.
What advantages does the creditors' committee offer?
In addition to the proposal for self-administration, the creditors' committee may also make a proposal to the court as the insolvency administrator. So you have it in your hands who should save your claims to the greatest extent possible. Maybe you know a very capable person who is best suited for this job.
The provisional creditor committee even has the power to deselect a provisional insolvency administrator. Decisions of the bankruptcy court can be revised in this way.
Convert demand into participation
Another new feature is that you can convert your claims into a stake in the company during the crisis. This means that if renovation is successful, there is even a chance to achieve positive added value.
Should the reorganization fail and the company goes into bankruptcy, you also do not have to fear that a subsequent claim will be made. If the conversion of the claim into a business participation is confirmed by court, no additional claims may be made (§254 Abs. 4 InsO).
Further rights for creditors
Incidentally, if you continue to have business relationships with the debtor during the "protective shield procedure" and the bankruptcy procedure follows despite your best efforts, the liabilities that were established during this time are usually so-called bulk liabilities that are primarily satisfied in the bankruptcy procedure.
Conclusion: The first stage of the bankruptcy reform puts the main focus on the possible restructuring of companies and at the same time strengthens the rights of creditors. Should your business be in financial distress, the early application for self-administration helps to bring about a successful restructuring.
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