AUSTRIA Trends and Developments Contributed by: Bettina Knoetzl and Katrin Hanschitz, KNOETZL HAUGENEDER NETAL GmbH
KNOETZL Herrengasse 1 A-1010 Vienna Austria Tel: +43 1 3434 000
Fax: +43 1 3434 000 999 Email: office@knoetzl.com Web: www.knoetzl.com
In the face of economic uncertainty and politi- cal upheaval following the Russian invasion in the Ukraine, the Austrian judicial system remains stable and effective. Ultra-high-volume insol- vencies are keeping the courts and dispute resolution and insolvency practitioners busy. In parallel, practitioners in law firms and at court are continuing to progress the development of procedural and technological tools to improve access to justice. The Dispute Resolution Industry in Austria Insolvency-related litigation Austria is experiencing the largest insolvency in its history – indeed, one of Europe’s largest insolvencies: The former poster entrepreneur René Benko and his SIGNA Group, one of the country’s prominent real estate and retail con- glomerates, has filed for insolvency, with over EUR14 billion of debt registered against the vari- ous insolvent Austrian SIGNA entities to date. The complexity of the group, with over 1,000 companies, is proving a challenge to the Aus- trian courts, with multiple parallel insolvencies and, additionally, criminal investigations by a specially established task force. These insolvencies are providing a wide scope of activity for Austrian insolvency, litigation, arbitration, white collar crime and asset trac-
ing practitioners: pursuing claims against the insolvent entities, tracing assets that appear to have disappeared into René Benko’s founda- tions, filing and defending against contestation claims and damages claims, filing criminal com- plaints and acting as defence counsel in criminal investigations, acting as administrators or other- wise supporting the activities of the insolvency administrators of the many insolvent SIGNA enti- ties or seeking remedies against such activities. The sheer volume of legal activity triggered by the SIGNA insolvencies is extraordinary for the Austrian market. On a slightly smaller scale, Fisker GmbH, the Austrian subsidiary of the US electric vehicle manufacturer Fisker Inc. has disclosed insol- vency claims exceeding EUR3.5 billion. Both cases illustrate the impact of current eco- nomic strains on large corporations in Austria, as high financing costs, market uncertainties, and liquidity pressures drive major restructurings and insolvency actions across industries, particularly in the real estate and automotive sectors. Insol- vency rates in Austria have significantly risen in 2024, with business insolvencies increasing by a startling 24% (Q2 2023 v Q2 2024), with complete defaults in 27% of the cases. Many of the latter are “zombie, firms” – ie, businesses
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