OGH: Fraudulent bankruptcy also renders payment plan null and void
The Austrian Supreme Court (Oberster Gerichtshof, OGH) ruled for the first time on whether the provision of Sec. 158 of the Insolvency Code (Insolvenzordnung, IO), according to which the reorganization plan is null and void if the debtor is convicted of fraudulent bankruptcy (Sec. 156 Criminal Code (Strafgesetzbuch, StGB)) within two years of its final confirmation, also applies to the payment plan.
In the present case, the court of first instance assumed that this was the case. However, the appellate court followed a "new doctrine" according to which Sec. 158 IO does not apply to the payment plan.
The OGH has now settled this dispute:
Sec. 193 (1) (2) IO stipulates and is interpreted to the effect that the provisions on the reorganization plan are also to be applied to the entire payment plan procedure, unless "otherwise ordered". The question was whether Sec. 194 (2) IO (inadmissibility of the payment plan) and Sec. 196 (2) IO (nullity of the payment plan) as "other orders" preclude the use of Sec. 158 IO in the payment plan proceedings.
The OGH first stated that Sec. 194 (2) IO is obviously the counterpart to Sec. 141 (2) IO and thus constitutes an "other order". However, this cannot be assumed for Sec. 196 (2) IO in relation to Sec. 158 IO. The former stipulates the invalidity of the payment plan for a specific case, namely the non-payment of claims of the insolvency estate, without indicating that this case should constitute an "other order". Consequently, it cannot be deduced from this that the ground for nullity under section 196(2) IO should be the only one.
Thus, Sec. 158 IO is also to be applied in payment plan proceedings by way of Sec. 193 (1) (2) IO.
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