Insolvency 2025

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

fail to file for restructuring, the legal representatives expose themselves to possible civil (and criminal) charges. The procedure is not available to companies that are insolvent within the meaning of the Insolvency Act. Under the Austrian Insolvency Act, a debtor is deemed insolvent if the debtor is illiquid or over-indebted. Contents The restructuring plan must contain the proposed restructuring measures and their duration, the reduc - tion and deferral of claims, and any new financial support. In addition, the restructuring plan must describe the debtor’s economic situation ‒ in particu - lar, its assets, liabilities and the company. The affected creditors (including their classification into creditor classes), as well as the unaffected creditors, must be listed in the restructuring plan together with a factual justification for their inclusion/non-inclusion in the restructuring plan. The plan must include a conditional forecast of the company’s continued existence and a description of the necessary pre-conditions for the success of the plan. The restructuring plan must also explain why restructuring proceedings under the Restructuring Act ‒ rather than insolvency proceedings ‒ are in the best interests of the creditors. Process The court must examine the completeness of the information contained in the restructuring plan, as well as the appropriateness of the formation of the classes of creditors and the selection of the creditors concerned. Subsequently, the creditors vote whether to approve the restructuring plan. The restructuring plan is adopted if a majority of the creditors included in each class approves, whereby the sum of the claims of the creditors agreeing to the restructuring plan must amount to at least 75% of the total sum of the claims of the creditors included in the restructuring plan. The restructuring plan is binding on the parties if it is confirmed by court (Section 34 paragraph 1 of the Austrian Restructuring Act). Among the confirma - tion requirements is that the implementation of the plan must not unreasonably prejudice the interests of

creditors. If the consent of all classes of creditors is not obtained, the confirmation by the court – called a cross-class cram-down – is possible if the majority of the classes of creditors agree to the restructuring plan. Effects Once the restructuring plan is adopted by the affected creditors, confirmed by the court and thus becomes legally binding, the debtor is relieved of the obligation to pay the creditors the amount exceeding the quota. The effects of the legally binding restructuring plan only apply to the debtor and the affected parties (Sec - tion 39 paragraph 1 of the Austrian Restructuring Act). If the debtor defaults on the payment of a quota as provided in the restructuring plan, the relevant credi - tor’s claim comes into effect again ‒ albeit only in pro - portion to the unpaid quota. In the restructuring proceedings under Section 29 of the Austrian Restructuring Act, claims are classified as follows: • secured claims; • unsecured claims; • unsecured claims of vulnerable creditors; • bondholders; and • subordinate claims. The restructuring procedure is designed generally as a procedure with self-administration. The debtor in the restructuring procedure must in principle retain full or at least partial control over its assets and the day- to-day operation of its business. However, the court may make certain legal acts subject to the approval of a so-called restructuring officer or assign them to a restructuring officer. A restructuring officer must be appointed by court where: • the court has granted a stay of execution and the restructuring officer is necessary to protect the creditor’s interest; • the confirmation of the restructuring plan probably requires a cross-class cram-down; • the debtor or the majority of the creditors so request; or • circumstances are known that indicate self-admin - istration will lead to disadvantages for the credi - tors.

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