Shareholding as a Service: Temporary ownership as a restructuring bridge

This article outlines the purpose, structural variants, use cases, and guardrails of this instrument – with a focus on substance, transparency, and a clearly defined pathway out.

NPAs lose value not only through operational losses. Time, uncertainty, and forced selling pressure lead to erosion effects that are reflected in discounts, covenant stress, and stakeholder fatigue. The real price is drift: liquidity drain without value contribution, missed windows of opportunity in marketing processes, and the loss of optionality because decisions come too late or are no longer possible.

Stabilisation and workout processes often fail not because of the restructuring logic, but because of a lack of decision-making ability. Fragmented ownership structures, internal disputes, or lengthy approval processes block the measures that actually need to be taken, such as agreeing on a waiver, disposals, or interim financing.

This is where SaaS comes in – a temporary, professional shareholder/trustee solution that re-structures the shareholder level and re-stabilises the previous decision-making processes. An independent “shareholder” or trustee takes over the shareholding in a clearly defined mandate with governance, information rights, and exit mechanisms in order to create a decision-making and signing situation that is capable of acting. 

In practice, the NPA is clearly separated from the performing core units of the company in terms of corporate law (“ring-fencing”), clear decision-making and action structures are implemented, and “deal readiness” is signalled both internally and externally. 

Lenders receive clearly comprehensible decision-making processes that enable the accelerated implementation of previously agreed measures with reduced execution risk. Options remain open for owners and investors: reintegration, third-party sale, or plan implementation on a more transparent, value-preserving path with lower liability risk.

The key guardrails for a functioning SaaS are transparency, a clear distinction between instruction and discretion, documented decision-making, and credible, measurable exit triggers. Equally relevant is a certain sensitivity to insolvency matters, particularly with regard to timing, the presentation of performance and consideration, and the risk of legal contests. 

Temporary holding of shares can protect value by converting an NPA into an executable transaction. To this end, SaaS can be used to create the necessary structure, transparency, and a defined exit path. This allows what was previously an economically disadvantageous drift to be converted into positive momentum.

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Daniel Herper and Dr Leonard Szabó are lawyers at FPS (Frankfurt), focused on restructuring and insolvency. They advise lenders, shareholders, and corporates on workouts, distressed M&A, and cross-border restructurings.