Insolvency Law (Austria)

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The insolvency law of Austria is regulated in the insolvency regulation, in the contestation regulation and in the Insolvency Law Introduction Act.

Austrian bankruptcy history

The development of Austrian bankruptcy law stretches back to the 18th century. It developed under the influence of Spanish law ("Labyrinthus creditorum" by Franciscus Salgado de Somoza from 1651) and instead of the self-power of the creditors, it placed the judiciary in the foreground. At that time the bankruptcy was broken up into numerous lawsuits, and every creditor had to file a lawsuit to assert his claims. A single such lawsuit could hold bankruptcy off the ground for years. This system was followed in Austria in 1781 by the Josephinian and in 1786 by the West Galician judicial system. The French bankruptcy law , which emphasized the principles of the community of creditors, is considered to be the model of the Austrian Concursordnung of 1868 . However, since this system produced unsatisfactory material results, a profound reform was carried out from 1912 to 1914, which led to a further strengthening of the rule of law. Today's Austrian insolvency law is still based on the bankruptcy laws of December 1914 RGBl. 337/1914, which came into force on January 1, 1915. Since then there have been over 50 amendments to these laws, the most important of which are the amendments in 1981 (abolition of the bankruptcy classes), 1993 (introduction of the debt regulation procedure from January 1, 1995) and 2010 (abolition of the compensation order and creation of a uniform procedural structure within the framework of the Insolvency Code (IO)) were.

Bankruptcy proceedings

General

The original aim of the insolvency proceedings is the liquidation of the insolvent legal entity. All of the debtor's assets should be turned into money and distributed evenly among all creditors. In addition to this exploitation function of the insolvency procedure, the reorganization function came into being at the end of the 19th century with the aim of reorganizing companies through partial debt relief and reintegrating them into the competition. This form of redevelopment takes the form of compensation or compulsory compensation and, since July 1, 2010, a redevelopment plan that has taken its place. The third and most recent goal is the debt relief of natural persons in the context of the debt settlement process since 1995.

Both the debtor himself and every creditor are authorized to file an application for the opening of insolvency proceedings. The opening of insolvency proceedings also results in a process and execution suspension; all creditors must participate in the insolvency proceedings in order to enforce their claims. The debtor loses opening of insolvency proceedings in the form of reorganization proceedings without self-administration or bankruptcy his administer and dispose of his assets. Legal acts of the debtor over his property are therefore ineffective.

Procedure types according to IRÄG2010

The new insolvency law, which came into force on July 1, 2010 and is regulated in the Insolvency Code (IO), recognizes the following types of proceedings:

  • Restructuring procedure with self-administration §§ 169 ff IO
  • Restructuring proceedings without self-administration §§ 166 ff IO
  • Bankruptcy proceedings §§ 180 f IO
  • Debt settlement procedure §§ 181 ff IO

Rehabilitation process with self-administration

The restructuring procedure can only be applied for by the debtor himself. Due to the self-administration it is possible for the entrepreneur to continue to carry out legal acts, which, however, are under the supervision of a restructuring administrator appointed by the court. In order for a restructuring plan with self-administration to come about at all, it must be presented before the insolvency proceedings are opened. The debtor has to offer to repay at least 30% of his liabilities within 2 years. Furthermore, the majority of the creditors must agree to the restructuring plan, whereby it is a head and sum majority of the creditors present. The institution responsible for this is the regional court or, in Vienna, the commercial court.

Restructuring proceedings without self-administration

If the prerequisites for self-administration are not met, the debtor can still apply for restructuring proceedings and the court can open them. In terms of content, it is a matter of bankruptcy proceedings, in which, however, it is clear from the start that the debtor offers a restructuring plan with a minimum rate of 20% payable within 2 years. In these proceedings, the court appoints an administrator who has control over the restructuring process. As with the restructuring procedure with self-administration, the consent of the majority of all creditors present at the meeting (head and sum majority) is required.

Bankruptcy proceedings

If no reorganization plan is presented by the debtor before bankruptcy proceedings are opened, the bankruptcy court will open bankruptcy with an insolvency administrator. He is fundamentally obliged to continue the company. Insolvency or over-indebtedness is a prerequisite for bankruptcy proceedings, as is the existence of cost-covering assets. The application can be submitted by the debtor himself or by the creditor. In such a case, too, there is an enforcement ban until the so-called reporting meeting is held, during which the restructuring of the company is discussed and the debtor is given the opportunity to present a restructuring plan to the creditors within 14 days, the minimum rate of which is 20% got to. Only if the debtor does not submit a restructuring plan, the trustee has to tackle the realization of the company, which is sold as a whole or at least partially as a functioning company, as a living company achieves better realization proceeds. If there is no buyer, the trustee has to liquidate the company. He then makes use of all physical and immaterial objects and uses them to primarily pay the mass claims that are to be satisfied in full. Mass claims are acc. § 46 IO the liabilities arising after the opening of insolvency (e.g. electricity, gas, employees, etc.). The insolvency administrator can only distribute quotas to the insolvency creditors when all the claims have been paid in full.

Debt settlement process

The debt settlement procedure enables private debtors to discharge their debts by means of a payment plan and, if it fails, by means of a skimming procedure. If the debtor is a natural person who is not an entrepreneur, then the creditors can be offered a payment plan. Although the debtor is not subject to a minimum quota in the payment plan, as is the case with the restructuring plan, for example, the quota offered must be appropriate with regard to the income situation for the next five years (Section 194 (1) IO). The approval of the majority of the creditors present is required for the conclusion of a payment plan, which must again be both a head and a sum majority. The payment period has a maximum duration of 7 years (a shorter period can, however, be agreed), whereby the corresponding partial quotas are usually due monthly. The debtor is entitled to at least a grace period of 14 days. The debtor's entire assets must have been realized. If the offered payment plan fails due to the lack of majority approval of the creditors present, the skimming procedure is initiated. In the levy procedure, all attachable parts of the income are assigned to a trustee appointed by the court. With the coming into force of the Insolvency Law Amendment Act (IRÄG) 2017, the deadline for the skimming procedure was shortened from seven to five years. According to § 213 para. 1 IO to express the debtor's discharge of residual debt at the end of the term of the declaration of assignment.

Opening of the procedure

requirements

  • The debtor's insolvency, whereby the threatened insolvency is sufficient for the restructuring process and, in the case of legal entities, the over-indebtedness in general.
  • The initiation of the procedure must take place at the request of the debtor or a creditor.
  • The debtor must have cost-covering assets or, if this is not the case, an amount must be paid to cover the procedural costs, which is made available by the applicant in advance. This advance payment has to cover the minimum fee of the insolvency administrator and cash expenses.

Effects

  • The legal effects of the opening of insolvency proceedings begin on the day following the public announcement of the contents of the insolvency edict. The publication takes place through the inclusion in the insolvency file, which serves as the exclusive announcement organ in the insolvency proceedings and therefore contains not only the opening of proceedings but also information and data on the proceedings themselves.
  • The entire property of the debtor that is subject to execution is withdrawn from his free disposal. Only in the restructuring procedure with personal responsibility is the debtor allowed to continue to carry out legal acts himself during the proceedings, although he is under the supervision of a restructuring administrator. In bankruptcy proceedings and in reorganization proceedings without self-administration, a trustee is appointed by the court to perform the administrative activities.
  • The decision to initiate proceedings interrupts pending proceedings ex lege and can only be continued after the insolvency administrator has rejected the recognition of the claims. In addition to the process ban, an execution ban is also brought about, which means that all creditors have to participate in the process to enforce their claims.
  • In cases in which a trustee is appointed, the debtor is blocked from mail so that all mail goes to the trustee.

Course of the procedure

Registration of claims

All creditors have to register their claims with the court within the registration period. In insolvency proceedings, there is no compulsory lawyer, which is why in practice the creditor side is often represented by the privileged creditor protection associations KSV, AKV, ÖVC and ISA. A registration must contain the amount of the claim, the legal basis of the claim and the naming of the respective evidence. In the examination conference statutes, the insolvency administrator has the option to either recognize or dispute the registered claims. In the event of a dispute, the creditor of the disputed claim can assert the determination as insolvency claim by means of a declaratory judgment. If the registration deadline was missed and the claim was therefore not registered in time, it can still be registered later. However, a subsequent examination conference statute is necessary, the costs of which are to be borne by this creditor, provided there are no circumstances that prevented earlier registration (§ 107 IO). If a reorganization plan is finally confirmed, all creditors are entitled to the reorganization plan quota, including those who have not registered their claim.

Meetings of creditors

The strong involvement of the creditors in the insolvency proceedings is shown, among other things, in the fact that a large number of creditors' meetings are planned in the IO. The creditors' meeting is convened and chaired by the court. It must be convened in particular if the insolvency administrator, the creditors' committee or at least two insolvency creditors, whose claims, according to the court's estimate, reach a quarter of the insolvency claims, stating the subject of the negotiations, are requested.

The IO ordered the following meetings of creditors:

  • First creditors' meeting: It must generally take place within the first 14 days of the opening of the procedure. The insolvency administrator has to submit an initial report, for example on the economic situation or whether the restructuring plan can be fulfilled.
  • Report meeting: It must be held no later than 90 days from the opening and can also take place instead of the first creditors' meeting. A decision has to be made on how to proceed further.
  • Examination day statutes: The insolvency administrator submits declarations about the correctness of the claims by recognizing or denying them in whole or in part.
  • Redevelopment plant statute: The proposed redevelopment plan is voted on.
  • Payment plan statute: The payment plan of a natural person in the private debt settlement process is voted on.
  • Levy day statute: If the offered payment plan fails, the levy procedure will be initiated if the application is made in good time, which is to be decided in a separate day's statute.
  • Accounting statutes: The insolvency administrator has to submit accounts and also explain them. Both debtors and creditors as well as the members of the creditors' committee are entitled to complain about this accounting.

Administration and realization of the bankruptcy estate

The insolvency administrator has all circumstances relevant to the decision of the creditors, such as u. a. to examine the economic situation, the previous management, the cause of the financial collapse. His other tasks include determining the mass level and securing the assets. In any case, the bankruptcy estate will be realized in a debt settlement procedure, since in this procedure the debtor is no longer allowed to dispose of any assets.

Distribution to the creditors

The amount and time of the distribution of the quota depend on the procedure. The quota corresponds to the legally confirmed restructuring or payment plan. Without such a restructuring or payment plan, the quota is based on the insolvency administrator's report.

Tax treatment of bankruptcy losses

In March 2017, the Higher Administrative Court had to deal with the question of when exactly losses of assets from insolvency proceedings can be claimed. It was fundamentally established that losses are only deductible after they have finally occurred and can therefore only be claimed after the insolvency proceedings have been concluded.

Data

(Source: KSV.at)

Insolvency statistics 2012/2013/2014/2015
  2012 2013 2014 Change from
2013 to 2014 		2015 change of

2014 to 2015

Corporate bankruptcies
Opened bankruptcies 3,505 3,266 3,275 + 0.3% 3.115 −4.9%
Insolvency proceedings not opened due to a lack of cost-covering assets 2,536 2,193 2.148 −2.1% 2,035 −5.3%
Total bankruptcies 6,041 5,459 5,423 −0.7% 5,150 −5.0%
Estimated insolvency liabilities in EUR 3.2 billion 6.3 billion 2.9 billion −54.0% 2.4 billion −17.2%
Affected employees 23,300 31,800 20,900 −34.3% 21,800 + 4.3%
Affected creditors 78,500 85,700 76,000 −11.3% 64,700 −14.9%
out of court settlements 6th 11 3 −72.7% 1 −66.7%
Personal bankruptcies
Debt settlement procedures opened 9,523 9,022 8,414 −6.7% 8,829 + 4.9%
Estimated insolvency liabilities in EUR 1,229 million 1,137 million 1,098 million −3.4% 1,141 million + 3.7%
"Top ten" major bankruptcies in Austria
Companies state Type of procedure Opening
year		 Liabilities in
EUR million
ALPINE Bau-GmbH Vienna / Upper Austria bankruptcy 2013 3,500
KONSUM group of companies Vienna compensation 1995 1,889
A-Tec Industries Group Vienna / Graz Redevelopment procedures u.
bankruptcy		 2010 980
Maculan Group, Austria Vienna Compensation u. bankruptcy 1996 799
LIBRO AG Lower Austria Compensation u. bankruptcy 2001/02 349
Steiner Group Upper Austria bankruptcy 2001 342
AvW Group AG;
AvW Invest AG		 Carinthia bankruptcy 2010 291
Zielpunkt GmbH Vienna bankruptcy 2016

237

HALLEIN Paper AG Salzburg compensation 1993 211
Austrian Klimatechnik GmbH Lower Austria bankruptcy 1981 203
Most common causes of bankruptcy
Causes of bankruptcy 2000 2005 2011 2012 2013
1. Internal causes 33% 38% 53% 50% 47%
2. Negligence 27% 22% 11% 14% 17%
3. external triggers 11% 13% 16% 14% 16%
4. Lack of capital 19% 13% 11% 13% 10%
5. personal fault 7% 10% 6% 6% 7%
6. Others 3% 4% 3% 3% 3%

literature

  • Axel Reckenzaun: IRÄG 2010 - Insolvency Code . Linde Verlag, Vienna, 2010, ISBN 978-3-7073-1750-3 .
  • Andreas Konecny ​​(Ed.): ZIK Special - IRÄG 2010 . LexisNexis ARD ORAC, 2010, ISBN 978-3-7007-4664-5 .
  • Walter Buchegger: Austrian insolvency law . Springer, Vienna, 2010, ISBN 978-3-211-09435-8 .
  • Kurt Lichtkoppler, Ulla Reisch (Hrsg.): Handbuch Unternehmenssanierung . MANZ'sche, Vienna, 2010, ISBN 978-3-214-04171-7 .
  • Andreas Konecny, Günter Schubert (ed.): Commentary on the bankruptcy laws . MANZ'sche Wien, 2009, ISBN 978-3-214-12086-3 .
  • Peter Angst, Werner Jakusch, Franz Mohr: Execution order (EO) (for Austria) . Manz'sche Verlags- u. University Bookstore , 2004, ISBN 3-214-01076-X .
  • Walter H. Rechberger, Mario Thurner: Insolvency law. Introduction and floor plan . Facultas Universitätsverlag, 2004, ISBN 3-85114-672-7 .

Web links

Individual evidence

  1. ↑ ris.bka.gv.at
  2. ↑ ris.bka.gv.at
  3. ↑ ris.bka.gv.at
  4. ↑ Insolvency File - Simple Search. In: ediefe.justiz.gv.at. Retrieved September 11, 2017 .
  5. ↑ Decision of the VwGH Ro 2014/13/0042 of March 31, 2017
  6. ↑ Downloads insolvency statistics . KSV1870 Holding AG. Retrieved May 13, 2019.
  7. ↑ Hans-Georg Kantner, Head of KSV Insolvenz: Insolvency Statistics Entrepreneurs and Private 2012. (PDF) (No longer available online.) KSV, January 3, 2013, archived from the original on August 12, 2014 ; accessed on August 6, 2014 . Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. @1@ 2Template: Webachiv / IABot / www.ksv.at
  8. ↑ Hans-Georg Kantner, Head of KSV Insolvenz: Unternehmensinsolvenzen 2013. (PDF; 616kB) (No longer available online.) KSV, January 3, 2014, archived from the original on August 12, 2014 ; accessed on August 6, 2014 . Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. @1@ 2Template: Webachiv / IABot / www.ksv.at
  9. ↑ Hans-Georg Kantner, Head of KSV Insolvenz: Privatinsolvenzen 2013. (PDF; 125kB) (No longer available online.) KSV, January 3, 2013, archived from the original on August 12, 2014 ; accessed on August 6, 2014 . Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. @1@ 2Template: Webachiv / IABot / www.ksv.at
  10. ↑ Hans-Georg Kantner, Head of KSV Insolvenz: Unternehmensinsolvenzen 2014. (PDF; 319kB) (No longer available online.) KSV, January 7, 2015, archived from the original on March 4, 2016 ; accessed on December 13, 2015 . Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. @1@ 2Template: Webachiv / IABot / www.ksv.at
  11. ↑ Dr. Hans-Georg Kantner: Insolvency Statistics 2015 KSV 1870. January 8, 2016, accessed on August 3, 2016 .
  12. ↑ Hans-Georg Kantner, Head of KSV Insolvenz: Privatinsolvenzen 2014. (PDF; 93kB) KSV, January 7, 2015, accessed on December 13, 2015 .
  13. ↑ Hans-Georg Kantner, Head of KSV Insolvenz: Causes of Insolvency 2012: No prosperity without bankruptcies. (PDF; 131 kB) (No longer available online.) KSV, May 21, 2013, archived from the original on August 12, 2014 ; accessed on August 6, 2014 . Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. @1@ 2Template: Webachiv / IABot / www.ksv.at
  14. ↑ Hans-Georg Kantner, Head of KSV Insolvenz: Causes of Insolvency 2013: The boss is to blame! (PDF; 80 kB) (No longer available online.) KSV, May 5, 2014, archived from the original on August 12, 2014 ; accessed on August 6, 2014 . Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. @1@ 2Template: Webachiv / IABot / www.ksv.at
  15. ↑ The standard: boss failure is the main reason for bankruptcies. May 18, 2012, accessed August 6, 2014 .