AUSTRIA Law and Practice Contributed by: Markus Fellner, Stefan Sallat and Florian Henöckl, Fellner Wratzfeld & Partner Rechtsanwälte GmbH
tors if and to the extent that their joint interests are affected. In any structuring of such out-of-court settlements/ restructuring, the potential risks of an ensuing insol- vency and related legal action (such as a challenge or a voidance of pre-insolvency contractual arrange- ments by an insolvency administrator) must be con- sidered. Restructuring Within Insolvency Proceedings Other than typical insolvency proceedings aiming at the full liquidation of a company’s assets, Austrian law provides for restructuring proceedings in the course of insolvency proceedings based on a so-called “restructuring plan” ( Sanierungsplan ). These proceed- ings provide for a certain minimum of the debtor’s lia- bilities (at least 20%) to be repaid during a maximum period (of two years). As an additional differentiation, these proceedings may be opened by an insolvency court providing for self-administration (in this case, 30% of the debtor’s liabilities have to be repaid) of the debtor (where the management bodies would retain their operational responsibility) as opposed to the withdrawal of self-administration (where a restructur- ing administrator, similar to an insolvency administra- tor, would take over day-to-day management). While such insolvency court restructuring proceedings can be, and are frequently, initiated without a prior agree- ment among the creditors of the debtor, it is common in Austrian restructuring practice that the key terms and conditions of such a restructuring settlement before the court are pre-agreed among the majority of creditors of the debtor. 7.5 Risk Areas for Lenders The key risk or impact of the insolvency proceed- ings over the assets of a borrower is the fact that the competence for the enforcement of any contractual rights and/or securities is no longer with the creditor or ordinary courts but with the insolvency administra- tor; while this may not in all instances be a detriment as to substance, it typically causes significant delays. Other than that, as per their specific set of duties under the insolvency legislation, the insolvency administra- tor will typically closely scrutinise any and all contrac- tual and, in particular, security arrangements entered
into by the borrower for the benefit of a creditor prior to the opening of insolvency proceedings. This may not only result in delays in enforcement, but also in (alleged) claw-back of claims (on the grounds of the nullity/avoidance of contractual arrangements, includ- ing the creation of security rights).
8. Project Finance 8.1 Recent Project Finance Activity
In Austria, the majority of project financing is generally in the fields of life science, technology, infrastructure and energy. Due to the current economic dislocations, there is currently some noticeable decline in project financing in Austria. 8.2 Public-Private Partnership Transactions The relevant legislation for the implementation of pub- lic–private partnership transactions in Austria involves numerous areas of law (both at the Austrian federal level as well as provincial laws and municipal regula- tions). Areas of interest involve corporate law (regard- ing the structuring of a project), general civil law, pub- lic procurement, subsidies, zoning and permissions, administrative law in all its variations (environmental, health and other industry-specific laws), etc. The legal structure of public-private partnerships will largely depend on the type and sector of the project implemented. Possible structures include all stand- ard models, in variations, attributing the property and legal title in the project, the operation and funding to be provided by either the private investor, the public sector or both of these functions jointly; as is com- monly recognised in the field of public–private part- nership, these forms of co-operation could take the form of the operating model, the co-operation model, the concession model, the contracting model or the leasing model. In terms of market practice, public–private partnership models are applied for a variety of transactions which extend to areas such as roads, logistics, education and, most recently and increasingly, healthcare. Prior to structuring a project finance transaction in Austria, a full analysis of any and all risks involved would be required, including operational risks, design, develop-
25 CHAMBERS.COM
Powered by FlippingBook