Restructuring and insolvency—Austria—Q&A guide
Published by a LexisNexis Restructuring & Insolvency expert
Last updated on 16/10/2019

The following Restructuring & Insolvency practice note provides comprehensive and up to date legal information covering:

  • Restructuring and insolvency—Austria—Q&A guide
  • 1. What main legislation is applicable to insolvencies and reorganisations?
  • 2. What entities are excluded from customary insolvency or reorganisation proceedings and what legislation applies to them? What assets are excluded or exempt from claims of creditors?
  • 3. What procedures are followed in the insolvency of a government-owned enterprise? What remedies do creditors of insolvent public enterprises have?
  • 4. Has your country enacted legislation to deal with the financial difficulties of institutions that are considered ‘too big to fail’?
  • 5. What courts are involved? What are the rights of appeal from court orders? Does an appellant have an automatic right of appeal or must it obtain permission? Is there a requirement to post security to proceed with an appeal?
  • 6. What are the requirements for a debtor commencing a voluntary liquidation case and what are the effects?
  • 7. What are the requirements for a debtor commencing a voluntary reorganisation and what are the effects?
  • 8. How are creditors classified for purposes of a reorganisation plan and how is the plan approved? Can a reorganisation plan release non-debtor parties from liability and, if so, in what circumstances?
  • 9. What are the requirements for creditors placing a debtor into involuntary liquidation and what are the effects? Once the proceeding is opened, are there material differences to proceedings opened voluntarily?
  • More...

Restructuring and insolvency—Austria—Q&A guide

This Practice Note contains a jurisdiction-specific Q&A guide to restructuring and insolvency in Austria published as part of the Lexology Getting the Deal Through series by Law Business Research (published: June 2022).

Authors: Freshfields Bruckhaus Deringer—Friedrich Jergitsch; Jasmin Julia Denk

1. What main legislation is applicable to insolvencies and reorganisations?

Insolvency

The legislation applicable to the insolvency of natural persons and companies having their centre of main interest in Austria is the Austrian Insolvency Code (the Insolvency Code) as amended. The Insolvency Code provides for, in principle, three different proceedings:

  1. bankruptcy proceedings;

  2. reorganisation proceedings with self-administration (debtor in possession proceedings); and

  3. reorganisation proceedings without self-administration.

In addition to the Insolvency Code, the procedures for the restructuring and orderly winding up of credit institutions, financial institutions that are subject to supervisory consolidation and particular financial holding companies are established in the Act on the Recovery and Resolution of Banks (BaSAG), which has implemented Directive 2014/59/EU on the recovery and resolution of credit institutions and investment firms (BRRD) into national Austrian law.

Further, the Austrian civil law, company law, labour law, information technology or intellectual property law, as well as tax law, include, inter alia, insolvency related provisions.

Restructuring and reorganisation

In relation to the restructuring of viable and (still) solvent companies and entrepreneurs, which are in financial difficulties, the Austrian Restructuring Code (the Restructuring Code) offers a novel preventive restructuring framework.

Related documents:
Key definition:
Insolvency definition
What does Insolvency mean?

This can be defined by two alternative tests (Insolvency Act 1986, s 123):

• cash flow test: a company is solvent if it can pay its debts as they fall due, no matter what the state of its balance sheet (Re Patrick & Lyon Ltd [1933] Ch 786);

• balance sheet test: a company which can pay its debts as they fall due may be insolvent if, according to its balance sheet, liabilities (including contingent liabilities) exceed assets.

Popular documents