Austrian OGH on Insolvency Reorganisation Plans

Jan 31, 2025 Benn-Ibler Rechtsanwälte

The Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH) has clarified important questions with regard to the conditions for the confirmation of reorganisation plans.

In the case at hand, the creditors had accepted the debtor’s reorganisation plan in the course of a large-scale insolvency of a real estate company. One of the conditions for having the plan confirmed by the court was the requirements that the debtor must comply with the requirements as set out in Section 152a (1) of the Austrian Insolvency Code (Insolvenzordnung, IO) by a certain date. These requirements included, among others, payment of the insolvency administrator’s remuneration and the creditor protection associations’ remuneration.

In the case at hand, the fee of the insolvency administrator amounting to over EUR 26 million was only partially paid. The bulk of the fee was deferred by the administrator, who also waived the security for her fee.

The restructuring plan was confirmed by the court of first instance. However, the appellate court overturned this decision and refused to confirm it.

The OGH confirmed the decision of the appellate court. In principle, the confirmation of a restructuring plan requires full payment or at least the securing of the claims as listed in Section 152a (1) of the IO. The law does not provide for the payment or securing of future payments to be achieved through implementation of a restructuring plan. It should be emphasised that, due to their impartial role, insolvency administrators are not in a position to enter into agreements with creditors or the debtor regarding the administrator’s remuneration. This means that the deferral of insolvency administrators’ remuneration or the waiver of a guarantee cannot replace statutory requirements.

OGH 8 Ob 97/24h (24 October 2024)