Austria: OGH Ruling on Intra-Group Short-Term Deposit Refund Bans

Apr 16, 2026 Benn-Ibler Rechtsanwälte

The Austrian Supreme Court (Oberster Gerichtshof, OGH) determined that an intra-group short-term deposit of EUR 46 million may constitute a prohibited repayment of deposits if the arrangement does not adhere to arm’s length standards and is primarily intended to temporarily enhance the group’s balance sheet.

In the case at hand, the debtor had formed part of an international construction group. In late 2011, a sophisticated financing structure was adopted in which German subsidiaries transferred receivables to a group entity through factoring, thereby enhancing liquidity. These funds were subsequently redistributed within the group and ultimately placed by the debtor as a short-term deposit of EUR 46 million with the second defendant.

The insolvency administrator asserted that the short-term deposit constituted a violation of the prohibition on the return of deposits, as it was not executed under arm’s length conditions, lacked adequate security, and appeared to be intended solely to temporarily enhance the debtor’s balance sheet ratios. Furthermore, he claimed damages amounting to EUR 19 million as well as default interest. He also contended that the subsequent payment of EUR 19 million to German subsidiaries represented merely a 'sham payment' and therefore did not qualify as valid repayment of the loan.

The defendants argued that the debtor gained financial advantages through factoring and later short-term investments. The short-term deposit offered a greater interest rate compared to a traditional bank deposit, and the second defendant possessed an exceptionally high credit rating at that period.

The claim was dismissed by the lower courts, which determined that the overall arrangement constituted an operationally justified measure intended to enhance balance sheet ratios. The short-term deposit was not considered by the courts to be an impermissible repayment of a deposit.

The OGH provided clarification on this matter, concluding that the short-term deposit contravened the prohibition against the return of deposits due to its absence of arm’s-length terms, inadequate collateral, and its incorporation into a broader intra-group arrangement. Consequently, the debtor's right to repayment under Section 83 of the Austrian Limited Liability Companies Act (GmbH-Gesetz) was established at the moment the loan was disbursed.

The OGH determined that the repayment claim had been fully satisfied. The second defendant made an initial repayment of approximately EUR 18.4 million, followed by an additional payment of around EUR 27.8 million. The claimant was unable to demonstrate that EUR 19 million of these repayments originated solely from the debtor’s own resources; consequently, they were not considered to have a debt-settling effect. Furthermore, the OGH dismissed claims brought under the Austrian Equity Substitution Act (Eigenkapitalersatzgesetz, EKEG), noting that the borrowers in the factoring arrangement were the German subsidiaries rather than the debtor. There was also no basis for compensation regarding the alleged loss of EUR 322,000, as this expense pertained to the subsidiaries and not to the debtor.

Although the managing director breached the duty of care by engaging in an unauthorized loan arrangement, no compensable loss persisted since the asset outflow was entirely restored. Consequently, the OGH granted the claimant only default interest against the second defendant for the interval between the disbursement and repayment of the short-term deposit.

OGH 6 Ob 233/24v (28.01.2026)