AUSTRIA Law and Practice Contributed by: Markus Fellner, Florian Kranebitter, Elisabeth Fischer-Schwarz and Florian Henöckl, Fellner Wratzfeld & Partners
8. Setting Aside or Annulling a Transaction 8.1 Circumstances for Setting Aside a Transaction or Transfer Historical Transactions
Furthermore, the legal representatives may be liable to the entity for any payments executed while already in a state of insolvency. As stated in 7.1 Duties of Directors , managing direc - tors are also personally liable for making payments that are not in a diligent manner after the company becomes insolvent or over-indebted. 7.3 Duties and Personal Liability of Officers Supervisory board members are not obliged to file for insolvency. However, supervisory board members are obliged to encourage the management board to sub - mit an application after the company becomes insol - vent or over-indebted. Supervisory board members are liable if they fail to fulfil this duty. 7.4 Other Consequences for Directors and Officers See 7.2. Personal Liability of Directors . The Company Law Digitalisation Act 2023 ( Gesells- chaftsrechtliches Digitalisierungsgesetz 2023 ) intro - duced a new exclusion regime for managing direc - tors, which has been in force since 1 January 2024, for criminal offences committed after this date ( Rück- wirkungsverbot ). A managing director may not be a person who has been sentenced by a court to more than six months’ imprisonment, provided that the conviction was based on selected criminal offences related to the management of the company (eg, fraud, fraudulent crida and money laundering) ‒ regardless of whether the sentence was conditionally discharged or unconditional. This legal consequence also applies to such a conviction by a foreign court for a comparable criminal offence. The legal consequence of disqualification can be con - ditionally discharged and is also applicable to con - tributors. The disqualification ends three years after the conviction becomes legally enforceable.
The provisions of the Insolvency Act dealing with void - ance rights aim at safeguarding the insolvent estate to the satisfaction of creditors. Legal acts and transac - tions that have taken place within certain time periods prior to the commencement of insolvency proceed - ings over the assets of the debtor, and which relate to the assets of the insolvent (illiquid or over-indebted) debtor, can be contested by the insolvency admin - istrator. Therefore, the satisfaction of a pledgee can never be detrimental to the debtor’s assets, as the creditor only obtains the equivalent of what would be the outcome of a sale in the course of insolvency proceedings. The general prerequisites for avoidance under Aus - trian insolvency law are the following: • the avoidance results in an increase of the insol - vency estate ( Befriedigungstauglichkeit ); and • the challenged legal act or transaction caused the direct or indirect discrimination of creditors ( Gläu- bigerbenachteiligung ). The discrimination of creditors will only be affirmed if the settlement fund ( Befriedigungsfonds ) available to creditors in the insolvency proceedings has been reduced in comparison with the amount available at the time of the contested legal act. Look-Back Period A transaction can be contested for: • intent to discriminate ( Benachteiligungsabsicht ); • squandering of assets ( Vermögensverschleuder- ung ); • free-of-charge disposal ( unentgeltliche Verfügung ); • preferential treatment of creditors ( Begünstigung ); and • knowledge of illiquidity ( Kenntnis der Zahlungsun- fähigkeit ).
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