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ARTICLE · 21 JULY 2026

The Protective Shield Proceeding – Requirements And Procedure

Mayer Brown
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Companies facing financial distress must carefully evaluate their restructuring options, with protective shield proceedings offering a unique opportunity to prepare an insolvency plan while maintaining existing management. This specialized form of preliminary self-administration requires precise timing and thorough preparation, as it is only available when a company faces imminent illiquidity or over-indebtedness but has not yet become actually illiquid.

GermanyInsolvency/Bankruptcy/Re-Structuring
Marco Wilhelm
Marco Wilhelm
Malte Richter
Malte Richter
Tina Hoffmann
Tina Hoffmann
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I. WHY THIS TOPIC IS IMPORTANT

When a company faces a crisis, soon the question arises which restructuring tool offers the greatest scope for action. The protective shield proceeding is a special form of preliminary self-administration and allows for the preparation of an (also operational) restructuring under the protection of insolvency law before an actual illiquidity has occurred.

The goal is to prepare an insolvency plan within a short period of time while retaining the existing management. If properly prepared, the proceeding can increase the chances of a successful restructuring, limit reputational risks, and facilitate an orderly coordination with creditors.

II. REQUIREMENTS FOR PROTECTIVE SHIELD PROCEEDINGS

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This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

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