Insolvency 2025

AUSTRIA Law and Practice Contributed by: Markus Fellner, Florian Kranebitter, Elisabeth Fischer-Schwarz and Florian Henöckl, Fellner Wratzfeld & Partners

Rights of Set-Off If the creditor does not make use of the right to set- off during the restructuring proceedings, the creditor may basically only set off against the restructuring plan quota of their claim after final confirmation of the restructuring plan and cancellation of the restructuring proceedings. 5. Statutory Insolvency and Liquidation Procedures 5.1 The Different Types of Liquidation Procedure As opposed to restructuring proceedings with or with - out debtor-in-possession under the Insolvency Act, liquidation proceedings aim to realise the assets of the estate and distribute the proceeds among the credi - tors. Restructuring proceedings that fail are trans - formed into liquidation proceedings. 5.2 Course of the Liquidation Procedure The commencement of insolvency proceedings leads to an ex lege discontinuance of any legal procedure to which the debtor is party and with regard to any enforcement actions being taken against the debtor. In liquidation proceedings, the court appoints an insolvency administrator to assume control. The man - agement of the debtor can no longer engage in any legal acts on behalf of the debtor from the time of the opening of insolvency proceedings. The court issues an official edict to be disclosed on the electronic noti - ceboard of the courts ( Ediktsdatei ), in which the exam - ination hearing is determined. Until this date, creditors may file their claims with the court. The court-appoint - ed insolvency administrator decides in the examina - tion hearing whether a creditor’s claim is contested or not; if it is contested, the respective creditor must commence legal proceedings in order to obtain an insolvency claim. The main focus of the insolvency administrator lies with the realisation of assets and the distribution of the proceeds among creditors accord - ing to the quota. When realising assets by way of sale of the debtor’s company, the insolvency administrator must first establish if continuance is not possible – in which case, the creditors’ committee has to agree and the confirmation of the insolvency court is required.

The following require the approval of the insolvency court as well as the creditors’ committee: • the sale or lease of the debtor’s company or parts thereof; • the sale or lease of all or the main movable fixed assets and current assets; and • the sale or lease of real property. As long as reorganisation proceedings are pending, the debtor’s business basically may not be sold. Organisation of Creditors or Committees In general, the creditors’ committee has to be con - sulted for each significant action of the insolvency administrator. Furthermore, certain actions have to be communicated to the insolvency court (such as set - tlement agreements or the fulfilment or termination of bilateral agreements where one party has not fulfilled its contractual obligations at the time of commencing insolvency proceedings) and others have to be con - firmed by the insolvency court (such as the sale of the entire business of the debtor). In addition to the insolvency administrator, the Insol - vency Act provides for a court-appointed creditors’ committee, which is explained in detail in 5.4 The Position of Shareholders and Creditors in Liquida- tion . 5.3 The End of the Liquidation Procedure(s) It is the insolvency administrator’s responsibility to realise the debtor’s assets. The Insolvency Act does not provide specific deadlines or timelines to be observed by the insolvency administrator in the course of liquidation proceedings when realising the assets. When all the proceeds have been distributed among the creditors, the insolvency proceedings are concluded. 5.4 The Position of Shareholders and Creditors in Liquidation In general, the creditors’ committee has to be con - sulted for each significant action of the insolvency administrator. Furthermore, certain actions have to be communicated to the insolvency court (such as set - tlement agreements or the fulfilment or termination of bilateral agreements where one party has not fulfilled

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