AUSTRIA Law and Practice Contributed by: Markus Fellner, Florian Kranebitter, Elisabeth Fischer-Schwarz and Florian Henöckl, Fellner Wratzfeld & Partners
Requirements in Application of the Restructuring Act The restructuring plan must describe the debtor’s eco - nomic situation ‒ in particular, its assets, its liabilities and the company itself. In addition, the restructuring plan must contain the proposed restructuring meas - ures and their duration, the reduction and deferral of claims, as well as the effects on jobs and any new financial support. Besides that, a financial plan for the duration of the restructuring measure must be prepared. The affected creditors (including classifica - tion into creditor classes) as well as the unaffected creditors must be listed in the restructuring plan, together with a factual justification for their inclusion/ non-inclusion in the restructuring plan. The plan must also include a (conditional) forecast of the company’s continued existence and a description of the neces - sary pre-conditions for the success of the plan. Commencement The commencement of restructuring proceedings under the Restructuring Act does not prevent the opening of insolvency proceedings. Only the grant - ing of a stay of execution ( Vollstreckungssperre ) pre - vents the opening of insolvency proceedings. In this regard, it does not matter whether the stay was grant - ed against one or more creditors. It must, however, be effective – meaning that it must have been served on at least one creditor. Approval First, the court will examine the completeness of the information contained in the restructuring plan as well as the appropriateness of the formation of the classes of creditors and the selection of the creditors con - cerned. After that, the creditors vote on the restructur - ing plan. In principle, the restructuring plan must be approved by the majority of the creditors included in each class, whereby the sum of the claims of the cred - itors agreeing to the restructuring plan must amount to at least 75% of the total sum of the claims of the creditors included in the restructuring plan. 4.3 The End of the Restructuring, Rehabilitation and Reorganisation Procedure Once the restructuring plan is approved, confirmed and legally binding, the debtor is relieved of the obli - gation to pay the creditors the amount exceeding the
quota as outlined in the reorganisation plan, which also includes a limitation on the creditors to set off their claims against this quota where general requirements are met. The effects of the legally binding restructuring plan also apply to those creditors that did not vote for the restructuring plan or did not participate at all. The insolvency proceedings are thus concluded. However, any rights of secured creditors who either have claims of separation to receive assets and/ or claims of separation to receive the proceeds of enforcement after sale must not be affected by the restructuring plan. Also, the restructuring plan may provide for the appointment of a trustee to either supervise the execution of the restructuring plan ( überwachter Sanierungsplan ) or to manage the estate with a mandate to fulfil the restructuring plan ( Treuhändersanierungsplan mit Vermögensübergabe ). If a debtor defaults on the payment of a quota as provided for in the restructuring plan, the respective creditor’s claim comes into effect again, but only in proportion to the unpaid quota. Where the statutory criteria for insolvency (over- indebtedness or illiquidity) are not yet met, a debtor may also file for the opening of reorganisation pro - ceedings under the Business Reorganisation Act. However, these proceedings are not relevant in prac - tice as the consent of all creditors is required. Austrian law does not contain specific provisions on pre-packaged sales or debt-for-equity swaps. Confirmation in Application of the Restructuring Act The court then has to decide whether to confirm the restructuring plan. Confirmation requirements include: • that the legal provisions on voting, voting rights and acceptance have been complied with; • that new financing provided for in the restructuring plan is required for the implementation of the plan; and • that the implementation of the plan does not unrea - sonably prejudice the interests of creditors.
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