Restructuring and insolvency—Austria—Q&A guide

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 2021).

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

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

Insolvency proceedings, including bankruptcy proceedings, reorganisation proceedings with self-administration (debtor in possession proceedings) and reorganisation proceedings without self-administration are governed by the Austrian Insolvency Code.

In addition to the Insolvency Code, the Austrian Business Reorganisation Law (the Business Reorganisation Law) governs a specific form of reorganisations, supporting the restructuring of a solvent debtor's business. The main objective of a reorganisation under the Business Reorganisation Law (in the following referred to as 'restructuring' or 'restructuring proceedings') is the timely introduction of necessary operational or financial measures in order to prevent the (still) solvent debtor from becoming insolvent. Restructurings under the Business Reorganisation Law differ from insolvency proceedings under the Insolvency Code notably. For example, restructurings neither affect creditors' rights, nor are they public. In practice, however, restructurings under the Business Reorganisation Law are seldom applied.

Of greater practical relevance is, by contrast, the Austrian Law on Equity Substitution (the Equity Substitution Law). Under the Equity Substitution Law, shareholder loans, which are granted to a company during its crisis, can be classified as equity substituting and may, therefore,

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