AUSTRIA Law and Practice Contributed by: Markus Fellner, Florian Kranebitter, Elisabeth Fischer-Schwarz and Florian Henöckl, Fellner Wratzfeld & Partners
appointed insolvency administrator (or, in the case of reorganisation proceedings with debtor-in-posses - sion, a “reorganisation administrator”) monitors the management of the debtor and the business situation, while at the same time preventing the discrimination of creditors. Also, specific actions – such as the review of claims and the contesting of transactions (avoid - ance) – are reserved for the reorganisation administra - tor, supervised by the court. Statutory Roles, Rights and Responsibilities of Officers In the event of liquidation and reorganisation pro - ceedings without debtor-in-possession, the estate is administered by a court-appointed insolvency admin - istrator. Specific actions are reserved for the insolven - cy administrator. By way of example, with regard to contracts with a mutual obligation to perform, where not all the parties have fully performed at the time of the commencement of insolvency proceedings, the insolvency administrator may elect to assume or with - draw from such contract. Furthermore, if the debtor is a tenant, the insolvency administrator can decide to terminate the lease con - tract as long as they respect the statutory notice peri - od or a shorter contractual notice period. If the debtor is a landlord, the insolvency administrator steps into the contract without requiring additional special ter - mination rights. Also, the insolvency administrator may terminate employment contracts upon partial or total shutdown of the business. In the event of such shutdown, the insolvency administrator only has to observe the stat - utory notice periods and ‒ if applicable ‒ the collective bargaining agreement. A contractually agreed longer notice period to terminate employment contracts is not applicable. Moreover, the Insolvency Act provides for a six-month moratorium if a contracting partner wants to terminate a contract with the debtor that is essential for busi - ness continuation. These contracts may only be ter - minated for good cause, and the deterioration of the economic situation of the debtor or default of payment of claims that were due before the commencement
of the insolvency proceedings are not considered to constitute such good cause. Appointment of Insolvency Administrators In general, insolvency administrators are selected by the court from the official list of insolvency administra - tors. Under the Insolvency Act, an administrator must be a respectable and reliable person experienced in business with proficiency in insolvency matters, including commercial law and business management where business entities are involved. Furthermore, the insolvency administrator must be independent of the debtor and the creditors. In all three types of proceedings provided for in the Insolvency Act (reorganisation proceedings with debt - or-in-possession, reorganisation proceedings without debtor-in-possession, and liquidation proceedings), claims are classified and ranked in the following order of priority. Secured Creditors Secured creditors either have claims of separation to receive assets ( Aussonderungsanspruch ) and/ or claims of separation to receive the proceeds of enforcement after sale ( Absonderungsanspruch ). Neither of these claims is affected by the commence - ment of insolvency proceedings – apart from possible voidance claims ( Anfechtung ). The secured creditor merely has to inform the administrator and, lacking acknowledgement of the claim, potentially file a law - suit against the insolvency administrator in order to enforce the senior security. However, secured creditors are subject to the restraint that no secured claim can be paid within six months from the commencement of insolvency proceedings if such claims might jeopardise the business continuity of the debtor. Only if the enforcement is vital to pre - vent severe economic disadvantage to the secured creditor may this provision be disregarded. 2. Creditors 2.1 Types of Creditors
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