Insolvency 2025

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

7. Duties and Liability of Directors and Officers 7.1 Duties of Directors In general, a managing director must act in a diligent manner. Any failure to act diligently exposes the man - aging director to liability vis-à-vis the company. The corresponding claims of the company, which may not be settled in a case where payments by the manag - ing directors are required for the satisfaction of the creditors, are subject to a five-year limitation period. In line with this obligation, managing directors must take action and measures to resolve the crisis at the first sign of a crisis and at the first occurrence of crisis indicators. In a case where the insolvency of a debtor has occurred (ie, over-indebtedness or illiquidity under the Insolvency Act), the legal representatives must file for insolvency with the competent court within a time period of 60 days at the latest. Any attempts at out- of-court restructurings have to observe this deadline as well, which means that such restructuring without the involvement of the court must take place (and be legally settled and enforceable) prior to insolvency or within the 60-day time limit. A managing director must not make any payments after the company has become insolvent or over- indebted. This does not apply to payments that are compatible with the diligence of a prudent and con - scientious manager even after this point in time. 7.2 Personal Liability of Directors If a debtor meets one of the criteria for insolvency under the Insolvency Act (see 7.1 Duties of Directors ) and the legal representatives have not filed for insol - vency accordingly (without undue delay and no later than 60 days after determining that the debtor is insol - vent), the legal representatives expose themselves to possible civil and criminal charges (including fraud or undue preference for a creditor) for impairment of the creditors’ interests. Disregarding the 60-day time limit is one of the few cases where a legal representative of a limited liability company may be held personally liable for damage inflicted on the company’s credi - tors (a possible reduction of the insolvency quota).

6.3 Applicable Law Please see 6.1 Sources of International Insolvency Law and 6.2 Jurisdiction . 6.4 Recognition and Enforceability The cross-border enforcement of court decisions between EU member states is controlled by various regulations – in particular, Regulation 1215/2012, which regulates the recognition and enforcement of judgments in civil and commercial matters. Within its scope of application, judicial decisions are enforce - able in another EU member state without any further proceedings. Only in a few exceptional cases may this be refused – for example, if such recognition is manifestly contrary to public policy (ordre public) in the member state addressed, or if the defendant was not able to arrange their defence in the proceedings in which the judgment was rendered. Judgments of non-EU member states may be declared enforceable in Austria if, inter alia, reciprocity is granted by international treaties and the judgments are enforceable in the state of origin. The EC adopted a proposal for EU accession to the Hague Recognition and Enforcement Convention, an international treaty to facilitate the recognition and enforcement of judg - ments in civil and commercial matters that are passed in non-EU member states. 6.5 Co-Ordination in Cross-Border Cases In cross-border cases, Austrian insolvency courts – as well as insolvency administrators – co-operate with foreign administrators by way of disclosure of infor - mation relevant to the foreign insolvency proceedings and by granting the foreign administrator the oppor - tunity to participate in the decision of the realisation of assets located in Austria or the realisation of reor - ganisation plans. 6.6 Foreign Creditors Foreign creditors are not dealt with in a different way during insolvency proceedings in Austria.

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