The use of insolvency law based re-organisation proceedings by small and medium-sized enterprises - the case of debtor in possession

With the introduction of the ESUG law, German insolvency legislation was reformed in 2012. It offers new proceedings for enterprise re-organisation, both before insolvency and between the application for insolvency and the start of the insolvency trial, e.g. with debtor in possession in both periods. However, still only a couple of hundred enterprises apply for proceedings with debtor in possession every year: This equals 1 or 2 % of all insolvent enterprises. The use of these new proceedings increases with enterprise size (from 10 employees onwards) and with enterprise age. The courts refuse only every tenth application for self-administration proceedings, thus offering insolvent enterprises more planning security for their company re-organisation.   

Kranzusch, P.; Icks, A. (2018): Die Nutzung insolvenzrechtlicher Sanierungswege durch kleine und mittlere Unternehmen - das Beispiel der Eigenverwaltung, IfM Bonn: Daten und Fakten Nr. 19, Bonn.

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