Only early action opens the door to self-administration.

Insolvency does not have to be the end. In self-administration (debtor-in-possession) and in protective shield proceedings, management continues to run its company while making use of the restructuring tools of the German Insolvency Code (InsO). What matters is an early decision and careful preparation.

LECON knows both sides: we support self-administration proceedings as advisers and as officers, and we are appointed by courts as insolvency administrators and custodians – never both in the same case. If desired, experienced LECON partners will themselves take on a board-level role in your company.

What is self-administration?

Self-administration (§§ 270 ff. InsO) – often also referred to as “insolvency in self-administration” – is an insolvency procedure in which the company itself conducts the proceedings. The power to manage and dispose of assets remains with management and does not pass to an insolvency administrator. A custodian appointed by the court monitors the economic situation and the management of the business.

In standard proceedings, by contrast, a (preliminary) insolvency administrator takes the helm. This change of control can interrupt ongoing restructuring steps, and personal relationships with customers and suppliers are often lost. Self-administration avoids this break: the company remains able to act, and the proceedings remain predictable.

When do the proceedings make sense? When the company is fundamentally viable for restructuring but an out-of-court restructuring is no longer possible – for example because individual creditors will not cooperate, onerous contracts need to be terminated or the liquidity for the restructuring is lacking.

Act early – before the door closes

With every week that passes, options fall away. The overview shows which routes are still open in which phase of the crisis.

• StaRUG is only available in the case of impending illiquidity – no longer in the case of illiquidity or over-indebtedness. The Protective shield closes once illiquidity occurs.
• Arrears in wages, taxes or social security contributions must be disclosed in the petition and can prevent the court from ordering self-administration (§ 270a Abs. 2, § 270b InsO).
• The financial plan must support the continuation of the business for six months. Once liquidity has been used up, this is hardly achievable.
• Duty to file and liability: In the case of illiquidity, there are at most three weeks; in the case of over-indebtedness, six (§ 15a InsO). Payments made after the company has become insolvent can render management personally liable (§ 15b InsO).

What are the advantages of self-administration?

What are the requirements?

The first requirement is a ground for insolvency: impending illiquidity (§ 18 InsO), illiquidity (§ 17 InsO) or over-indebtedness (§ 19 InsO). Together with the petition, a self-administration plan must be submitted (§ 270a Abs. 1 InsO). It comprises:

1. a financial plan for six months showing the continuation of the business and the coverage of the costs of the proceedings,
2. a concept setting out the objective of self-administration and the planned measures, based on the nature, extent and causes of the crisis,
3. the status of negotiations with creditors, shareholders and third parties,
4. the arrangements, by which the obligations under insolvency law will be fulfilled,
5. a statement of the additional or reduced costs compared with standard proceedings.

In addition, management must declare (§ 270a Abs. 2 InsO) whether there are arrears in wages, pensions, taxes or social security contributions, whether protective instruments have already been applied for in the last three years and whether the disclosure obligations for the last three financial years have been met.

If the plan is complete and coherent, the court orders preliminary self-administration (§ 270b InsO). Carefully prepared planning is therefore the most important success factor – and the point at which LECON comes in.

Protective shield proceedings

Protective shield proceedings (§ 270d InsO) are a special form of preliminary self-administration for companies that act early. The court sets a deadline of no more than three months within which the company draws up an insolvency plan – protected from enforcement measures by creditors.

Limits: If the company becomes illiquid during the protective shield, this must be notified to the court. The court will terminate the protective shield early if the restructuring becomes futile or if the preliminary creditors' committee applies for this (§ 270e InsO).

How do the proceedings work?

From petition to termination of the proceedings, it usually takes six to twelve months.

Which procedure is right?

Which route is open depends above all on how far the crisis has progressed. The overview helps with an initial assessment; we make the decision together with you.

Learn more: Restructuring plan under StaRUG · Insolvency plan proceedings

How LECON supports you

LECON supports self-administration and protective shield proceedings as restructuring adviser or in a board-level role. At LECON, legal and business expertise sit in one team – specialist lawyers for insolvency and tax law work hand in hand with business economists and restructuring experts.

We take on the board-level role. If desired, an experienced LECON partner joins your company as managing director, member of the management board or general representative (Generalbevollmächtigter). This gives management the insolvency law expertise that self-administration requires. The existing management remains on board for operational business.

Experience from practice: Our partners regularly conduct proceedings as court-appointed insolvency administrators and custodians – most recently, for example, on appointment by the Munich Local Court (Amtsgericht München) in April 2026. This knowledge flows into every self-administration we support. A selection:

You will find further proceedings in our News.

Three partners, three perspectives

Lawyer, insolvency administrator, business economist: at LECON, these perspectives work together in every self-administration.

“Only early action opens the door to self-administration. The sooner we talk, the more routes remain open to you.”

“As an insolvency administrator, I have seen since 1999 why restructurings fail: the petition is filed too late. When well prepared, self-administration preserves what is often lost in standard proceedings.”

“Self-administration is won with robust figures. A financial plan that the court and creditors trust is the foundation for everything else.”

Quality with a benchmark: Thomas Klöckner is a member of Forum 270 – Qualität und Verantwortung in der Eigenverwaltung e.V. The professional association only admits members who have at least five years' experience in restructuring and insolvency administration and have supported at least five self-administration proceedings. We work in accordance with its “Principles for Proper Self-Administration” (“Grundsätze für die ordnungsgemäße Eigenverwaltung”, March 2022 version).

Frequently asked questions