OGH on the supervisory duties of the bankruptcy court

Nov 17, 2021 Benn-Ibler Rechtsanwälte

The bankruptcy court's power to supervise and issue instructions is in principle comprehensive and undoubtedly not limited to the "operational area of the bankruptcy trustee’s activities".

In the present case, a bankruptcy debtor applied for the termination of the bankruptcy proceedings. Since, according to her, the distribution of the assets of the estate would lead to the satisfaction of all creditors and cover the costs of the proceedings, there was no need for further employment and remuneration of the bankruptcy trustee.

The court of first instance dismissed the application, inter alia because the assets had not yet been fully realised.

By appeal, the debtor requested that the order be set aside and that the court of first instance be instructed to "request the bankruptcy trustee to submit the final account and the draft final distribution without delay". Since these activities were part of the core tasks of the bankruptcy trustee, which the bankruptcy court must supervise according to Section 84 para 1 of the Bankruptcy Code (Insolvenzordnung, IO), the debtor's application was to be understood as a complaint against individual measures or the conduct of the bankruptcy trustee - on which the bankruptcy court must decide pursuant to Sec. 84 para 3 IO. According to the court of appeal, the order of the court of first instance rejecting the debtor's application was such a decision, against which no appeal was admissible under Sec. 84 para 3 IO. The appeal was therefore dismissed.

In an extraordinary appeal, the debtor appealed to the Supreme Court (Oberster Gerichtshof, OGH), arguing that the case concerned the termination of the proceedings and not the supervision of the bankruptcy trustee in the "operational area" within the meaning of Sec. 84 IO. An appeal was therefore very much admissible.

The OGH confirmed that the debtor's application was an appeal pursuant to Sec. 84 para 3 IO and agreed with the view of the literature that the duty to supervise concerned all areas of activity of the bankruptcy trustee. Therefore, an appeal was not admissible.

The appeal was not upheld.

OGH 8 Ob 80/21d (03.08.2021)