Insolvency 2025

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

6. Cross-Border Issues in Insolvency 6.1 Sources of International Insolvency Law As stated in 6.2 Jurisdiction , with regard to insolvency proceedings in a non-EU member state, the Austrian Insolvency Act determines which jurisdiction’s deci - sions, rulings or laws govern or are paramount. In rela - tion to EU member states, the EU Insolvency Regula - tion applies. 6.2 Jurisdiction The Insolvency Act provides for recognition of the effects of insolvency proceedings opened in a non-EU member state (irrespective of an international treaty or the reciprocity principle), as well as decisions ren - dered in such proceedings, where the centre of main interests (COMI) of the debtor is located in the respec - tive foreign country and the insolvency proceedings are comparable to such proceedings in Austria – in particular, if Austrian creditors are treated in the same manner as creditors from the state of the opening of proceedings. However, recognition is denied if insol - vency or composition proceedings have already been opened in Austria, or if interim measures have been ordered or recognition leads to a result that clearly conflicts with public policy. With regard to EU member states, the EU Insolven - cy Regulation stipulates that any judgment opening insolvency proceedings handed down by a court of an EU member state that has jurisdiction shall be recognised in all other EU member states from the moment that it becomes effective in the EU member state where the proceedings were opened. The courts of the EU member state, within the territory of the debtor’s COMI, have jurisdiction to open insolvency proceedings. The COMI is the place in which the debtor conducts the administration of its interests on a regular basis and which is ascertainable by third parties. The debt - or’s COMI is determined at the time of filing for insol - vency. Therefore, debtors can influence the interna - tional jurisdiction – and thus the applicable insolvency law – by the timely shifting of the COMI to another EU member state in order to achieve easier debt relief.

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. The Insolvency Act provides for a further statutory body, a court-appointed creditors’ com - mittee consisting of three to seven members, which supervises and supports the insolvency administrator. In general, it is at the court’s sole discretion whether to install a creditors’ committee – although also upon the request of the creditors – if the characteristics or the particular scope of the debtor’s business make it imperative. However, the court is obliged to appoint such a committee if the debtor’s business is to be sold. The members of the creditors’ committee are also chosen by the court at its sole discretion, but the cred - itors, representatives of the works council and other special interest groups have a right to propose certain members. The members of the creditors’ committee are to be disclosed on the electronic noticeboard of the courts. Rights of Set-Off The Insolvency Act provides for the option to set off claims if such claims have already been subject to compensation according to general civil law at the time of commencement of the restructuring proceed - ings, irrespective of the fact that such claims might not have been due or might have been subject to a condition at the time of commencement of the pro - ceedings. Furthermore, creditors have to consider that a set-off is not possible for claims that arose within the six months prior to the commencement of insol - vency proceedings if the creditor knew (or negligently did not know) about the insolvency. Claims subject to set-off do not need to be formally filed in insolvency proceedings.

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