AUSTRIA Law and Practice Contributed by: Markus Fellner, Florian Kranebitter, Elisabeth Fischer-Schwarz and Florian Henöckl, Fellner Wratzfeld & Partners
4.5 The Position of Office Holders in Restructuring, Rehabilitation and Reorganisation See 4.4 The Position of the Debtor in Restructuring, Rehabilitation and Reorganisation . 4.6 The Position of Shareholders and Creditors in Restructuring, Rehabilitation and Reorganisation The commencement of formal in-court insolvency proceedings under the Insolvency Act automatically leads to a stay against all actions of unsecured credi - tors. Secured creditors, however, are generally not affected by the opening of insolvency proceedings. Under the Insolvency Act, insolvency creditors can commence legal proceedings against a court-appoint - ed insolvency administrator if the insolvency adminis - trator contests the creditor’s claim. Estate claims are to be paid by the insolvency administrator without any filing procedure. If estate claims are not paid by the insolvency administrator, estate creditors may apply to the insolvency court for remedy ( Abhilfeantrag ) or assert their claims by bringing an action against the insolvency administrator. Roles of Creditors In reorganisation proceedings, claims are classi - fied and ranked in order of priority as described in 2.1 Types of Creditors . The Insolvency Act provides for a court-appointed creditors’ committee, which is explained in detail in 5.4 The Position of Sharehold- If the restructuring plan suggested by the debtor is approved by the required majority of creditors and also confirmed by the court, the debtor must pay only the agreed quota to the dissenting creditors. Trading of Claims Against a Company According to the Austrian Supreme Court, the trade of an insolvency claim against a company during insol - vency proceedings is to be recognised. In the event of the acquisition of a claim after the opening of insol - vency proceedings, the acquirer generally enters into the insolvency participation claim ( Konkursteilnah- meanspruch ) of the former creditor. ers and Creditors in Liquidation . Claims of Dissenting Creditors
If the consent of all classes of creditors is not obtained, the confirmation by the court – called a cross-class cram-down – requires that, in addition to the general requirements, the majority of the classes of creditors agree to the restructuring plan. End of Restructuring Period in Both Cases However, as with liquidation proceedings, the debtor has the option to use the conclusion of a restructur - ing plan as an opportunity to rehabilitate its business. Where such restructuring plan is agreed upon in the course of liquidation proceedings, the debtor pays the quota agreed, which then leads to a residual debt discharge ( Restschuldbefreiung ). This option to reha - bilitate plays an important role in practice. 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 pro - portional to the unpaid quota. As stated in 4.2 Statutory Restructuring, Rehabilita- tion and Reorganisation Procedure , under the Insol - vency Act there are two types of reorganisation pro - ceedings ‒ namely, reorganisation proceedings with debtor-in-possession and reorganisation proceedings without debtor-in-possession. In both types of pro - ceedings, the main focus lies in the continuation of the debtor’s business or parts thereof. While in reor - ganisation proceedings with debtor-in-possession the debtor retains ‒ basically and subject to certain restrictions ‒ control over the estate’s assets and is only monitored by the insolvency administrator, the insolvency administrator takes control in reorganisa - tion proceedings without debtor-in-possession. In restructuring proceedings under the Restructuring Act, the debtor also retains control over the estate’s assets. However, in certain cases, a restructuring officer must be appointed. In addition to assisting the debtor or the creditors in the negotiation of a restruc - turing plan, the tasks of the restructuring officer are to monitor the debtor’s activities during negotiations and to report to the court. 4.4 The Position of the Debtor in Restructuring, Rehabilitation and Reorganisation
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