The Restructuring Review: Austria

Footnotes

1 Thomas Trettnak and Heinrich Foglar-Deinhardstein are both equity partners at CERHA HEMPEL Rechtsanwälte GmbH.

2 Insolvency statistic 2019 of the Austrian creditors' representation organisation KSV1870: https://www.ksv.at/KSV1870_Insolvenzstatistik_Unternehmen_2019_final.

3 Insolvency Law Amendment Act 2010 dated 20 May 2010, BGBl I 2010/29.

4 Feil, Insolvenzordnung 7, Section 1 FN 1 et seq.

5 The Insolvency Law Amendment Act 2010 adapted Austrian insolvency law to the new economic developments and abolished the practically irrelevant composition proceedings. Now, Austrian law provides for certain types of insolvency proceedings that are, however, all governed by the same regulations subject to a few specifics in each case.

6 This is one of the results of uniform insolvency proceedings.

7 Unternehmensreorganisationsgesetz, BGBl. I Nr. 114/1997, as amended.

8 For a comprehensive summary of this 'stand-alone pre-bankruptcy proceeding', see Mohr, Unternehmensreorganisationsgesetz – URG (1997).

9 State Holding Law of Carinithia, LGBl No. 37/1991, as amended.

10 Section 66 of the Austrian Insolvency Act.

11 Section 67 of the Austrian Insolvency Act.

12 OGH 3 Ob 9910/w.

13 Burger, Entwicklungslinien der Rechtsprechung zum Überschuldungstatbestand, wbl 1988.

14 Trettnak/Heimel, Eine Prognose, die beim Weiterleben hilft, Der Standard, Wirtschaft & Recht Journal, 13 October 2016, 14 et seq.

15 Leitfaden Fortbestehensprognose Gemeinsame Stellungnahme, March 2016.

16 Karollus/Huemer, Die Fortbestehensprognose im Rahmen der Überschuldungsprüfung2 (2006).

17 Birgmayer-Baier/Piringer/Schützinger, Die Plausibilisierung der 'überwiegenden Wahrscheinlichkeit' bei Fortbestehensprognosen durch Monte-Carlo-Simulationen, ZIK 2016/224.

18 See Section 70 of the Austrian Insolvency Act.

19 With regard to companies, the initial cost of the insolvency proceeding is estimated at €4,000. It is, however, not necessary that this amount is available in cash. Tangible assets as well as claims against creditors are considered sufficient for this purpose. Whether or not there are sufficient assets must be assessed ex officio. If there is a lack of sufficient assets, the competent court requests an advance payment from the applicant (debtor or creditor). The obligation to provide such an advance payment relates to the directors as well as shareholders holding a stake of more than 50 per cent.

20 In 2019, a total of 1,974 insolvency proceedings were rejected a limine because the petitioning entity did not have sufficient assets. This accounted for approximately 40 per cent of all insolvency proceedings in Austria in 2019.

21 Restructuring proceedings may already be applied for in case of impending illiquidity.

22 The debtor's right to keep administering its assets is governed by strict rules and is only possible for a very brief period (see Sections 169 and 170 of the Austrian Insolvency Act).

23 Section 169 of the Austrian Insolvency Act.

24 Section 149(1) of the Austrian Insolvency Act.

25 Section 150(1) of the Austrian Insolvency Act.

26 Regardless of this 90-day deadline, the court has the right to withdraw the debtor's right to self-administer its company inter alia if the debtor does not seem trustworthy, is not paying the priority claims in time or has made incorrect statements in its submission for the opening of restructuring proceedings.

27 Section 141(1) of the Austrian Insolvency Act.

28 In 2019, 342 administrated restructuring proceedings were initiated compared to 32 restructuring proceedings with self-administration. For further details, see the insolvency statistics for 2019 compiled by the Austrian creditors' representation organisation KSV1870.

29 This can be done until the termination of the proceedings. See Section 140(1) of the Austrian Insolvency Act.

30 Insolvency statistics for 2019 compiled by the Austrian creditors' representation organisation KSV1870.

31 See Sections 6 et seq. of the Austrian Insolvency Act.

32 The restriction set forth in Section 25a of the Austrian Insolvency Act does inter alia not apply to claims for payments from loans and employment contracts.

33 Trettnak, Vertragsauflösung bei Insolvenz erleichtert, Der Standard, 7 April 2014.

34 If the discharge of a secured claim could endanger the business carrying on, secured creditors are barred from enforcing their claim prior to the expiry of six months after the restructuring proceedings were opened if such enforcement might endanger the continuation of the debtor's business operations. See Section 11 (2) of the Austrian Insolvency Act.

35 See Section 25 of the Austrian Act on Limited Liability Companies and Section 84 of the Austrian Stock Corporation Act.

36 OGH 4 Ob 31/07y.

37 Section 159 of the Austrian Criminal Code.

38 Section 156 of the Austrian Criminal Code.

39 Section 158 of the Austrian Criminal Code.

40 Section 153c of the Austrian Criminal Code.

41 See Sections 27 to 32 of the Austrian Insolvency Act.

43 COM(2016) 723 final.

44 9236/18 ADD 1.

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