Bankruptcy proceedings
The opening and its effects, continuation or closure, realisation and distribution. A restructuring plan remains possible until termination.
For entrepreneurs and managing directors
Corporate insolvency in Austria
When an entrepreneur becomes unable to pay, deadlines matter: the insolvency application must be filed without culpable delay, at the latest within sixty days (section 69 of the Austrian Insolvency Code, Insolvenzordnung, ‘IO’); if it is filed late, managing directors may be personally liable. I represent entrepreneurs and managing directors in this situation, as well as creditors, and I support businesses in crisis at every stage, from the first cash-flow squeeze to the end of the proceedings. You will first learn from me which duties apply to you and which path is realistic.
When the insolvency application must be filed
The ground for opening proceedings is inability to pay (section 66 IO). For legal persons such as the GmbH, for registered partnerships in which no natural person has unlimited liability, such as the GmbH & Co KG, and for the estates of deceased persons, over-indebtedness is a further ground (section 67 IO): liabilities exceed assets and there is no positive going-concern forecast. Whether such a ground exists is the first question I clarify with you; all duties depend on it.
If a ground exists, the application must be filed without culpable delay, at the latest sixty days after the inability to pay arose (section 69 IO). The sixty days are an outer limit, not a time to wait: the application has to be filed earlier as soon as any further delay would be culpable. There is no culpable delay where the opening of restructuring proceedings (Sanierungsverfahren) with self-administration is being pursued diligently (section 69(2) IO). If the inability to pay was caused by a natural disaster, the period is extended to 120 days (section 69(2a) IO).
Private debts without a business background fall under the debt settlement proceedings instead; I describe how they work on the page Personal bankruptcy.
The three types of proceedings
- Bankruptcy proceedings (Konkursverfahren): the assets are realised and the proceeds distributed among the creditors. Even here, a restructuring plan can still be applied for until the proceedings are terminated (section 140 IO). More on the page Bankruptcy proceedings.
- Restructuring proceedings without self-administration: an insolvency administrator (Masseverwalter) takes over the management; creditors must be offered at least 20 % of their claims (the “quota”) within two years (section 141 IO). If the restructuring plan is accepted and finally confirmed, the company continues to exist.
- Restructuring proceedings with self-administration: you continue to run the company yourself, supervised by a restructuring administrator (Sanierungsverwalter); transactions outside the ordinary course of business require the administrator’s approval (section 171 IO). This requires a restructuring plan offering creditors at least 30 % of their claims within two years, together with an asset register, a statement of assets and liabilities and a financial plan for the following ninety days (section 169 IO). More on the page Restructuring proceedings.
The way out of the crisis
My work often begins before any insolvency application: when payments falter, the bank calls in its financing, arrears with the tax office and the health insurance fund build up, or the first enforcement proceedings are pending. At this stage I develop a concept with you that is meant to lead the business out of the crisis. To do that we take a sober look at the figures, in coordination with your tax adviser, and choose the goal: an out-of-court settlement with the creditors, restructuring proceedings with or without self-administration, or a restructuring plan within bankruptcy proceedings. An orderly winding-up of the business can also be the outcome of this assessment.
A restructuring concept has to deliver more than a list of payment concessions: it names the causes of the crisis, contains a sound going-concern forecast and shows in a verifiable way how the quota offered is to be financed – ongoing operations, the sale of assets the business can spare, or contributions from shareholders and third parties. At the same time, what happens during the preparation must be legally secured: payments to individual creditors may be voidable and trigger liability, the negotiations with the bank, suppliers, the tax office and the health insurance fund need a sequence, and the sixty-day period keeps running. These parts interlock; I bring them together into a concept that can stand up in court and before the creditors.
Such a concept can be developed at any stage: before the application, while every route is still open; after the opening, when continuation, a restructuring plan or realisation have to be weighed; and in advanced proceedings, when what matters is using the room for manoeuvre that remains. What is still possible at which point is among the first questions we clarify.
Complicated situations can be sorted out as well: several affected companies, personal liability and guarantees, financing that has been called in, suppliers who will only deliver against advance payment. I break such a situation down into its legal components and set the steps in an order in which each one prepares the next.
What I handle for you
I first assess whether a ground for opening proceedings exists and which type of proceedings fits your situation; I will tell you frankly, even if the answer is uncomfortable. I then prepare the application with all enclosures and represent you before the insolvency court; I coordinate the financial plan with your tax adviser or bookkeeper.
My representation does not have to start at the beginning. I am frequently retained once proceedings have been opened: I then first examine whether an appeal (Rekurs) against the opening has prospects of success, and represent you vis-à-vis the insolvency administrator, in the court hearings and in drawing up a restructuring plan. In most proceedings I work together with the insolvency administrator in doing so and coordinate the steps with him, in bankruptcy proceedings just as in restructuring proceedings. I also represent creditors lodging and enforcing their claims; I explain how the lodgement of claims works on a separate page.
The liability of managing directors and other corporate officers is a field of its own: they are liable to the company for breaches of the duty of care (section 25 GmbHG, section 84 AktG) and to the creditors for the damage caused by a late filing. After the opening it is typically the insolvency administrator who pursues such claims. I advise directors and board members before it comes to that and represent them once such claims are raised against them. As an insolvency administrator I examine such claims myself; I therefore know what this examination turns on.
Claims based on insolvency avoidance (Anfechtung) are a related field (sections 27 et seq. IO): the insolvency administrator can challenge certain transactions from the period before the opening and reclaim what was given, so that all creditors are treated equally. I know these claims from both roles: as insolvency administrator I raise them myself, and as counsel I advise and represent clients confronted with an avoidance claim, out of court and in litigation.
Having been involved in more than 300 insolvency proceedings, I know both sides of the process: as court-appointed insolvency and restructuring administrator and as counsel for debtors and creditors. I therefore know what administrators and courts look for, and I use this knowledge for you.
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Frequently asked questions about corporate insolvency
What do managing directors risk by filing late?
They are liable to creditors for the damage caused by the delay, for instance where the delay reduces their quota (section 69(2) and (5) IO). Criminal liability can also arise during a crisis, for instance for grossly negligent impairment of creditors’ interests: an offence is committed by anyone who acts contrary to the principles of sound management, for example by failing to keep proper books or to draw up annual accounts, and thereby, through gross negligence, brings about their own inability to pay or, while knowing of it or negligently unaware of it, frustrates or reduces the satisfaction of at least one creditor (section 159 of the Austrian Criminal Code, StGB); for managing directors and board members this applies through section 161 StGB.
Can the company survive insolvency?
Yes, through a restructuring plan. It can be accepted in both forms of restructuring proceedings and equally in bankruptcy proceedings; there the application can be made until the proceedings are terminated (section 140 IO). Creditors must be offered at least 20 % of their claims, payable within two years of acceptance, or at least 30 % with self-administration (sections 141 and 169 IO). If the creditors present at the hearing approve it with both majorities, by number of creditors and by claim value, and the court confirms the plan with final effect, the business is preserved and the debtor pays the quota. Whether this is realistic in your case depends on the figures and the financing; you will hear my assessment in the initial consultation. I describe the procedure on the pages Restructuring proceedings and Bankruptcy proceedings.
What is insolvency avoidance (Anfechtung)?
The insolvency administrator can challenge transactions from the period before the opening so that all creditors are treated equally: for instance the preferential treatment of an individual creditor after the inability to pay arose (section 30 IO), or transactions where the counterparty knew or ought to have known of the debtor’s inability to pay (section 31 IO). The grounds of sections 27 et seq. IO are precisely defined. I raise such claims myself as insolvency administrator, and as counsel I advise and represent clients affected by an avoidance claim.
What does corporate insolvency cost?
The costs depend on the type and course of the proceedings: the flat court fee (Pauschalgebühr), the remuneration of the insolvency administrator (sections 82 and 82a IO) and the remuneration of the privileged creditor protection associations (section 87a IO) follow statutory rates. I calculate an initial estimate for your case with my InsoRechner app; I will tell you the costs of my representation in advance.
Does Austrian insolvency law apply to my company?
Austrian courts have jurisdiction to open insolvency proceedings if the centre of the debtor’s main interests is in Austria; within the EU this follows from Article 3(1) of the European Insolvency Regulation (Regulation (EU) 2015/848, ‘EIR’). In the case of a company or legal person, the place of the registered office is presumed to be the centre of its main interests in the absence of proof to the contrary. In the case of an individual exercising an independent business or professional activity, it is presumed to be that individual’s principal place of business. That presumption only applies if the registered office or the principal place of business has not been moved to another Member State within the 3-month period prior to the request for the opening of insolvency proceedings. I advise in German, Polish and English and also handle cross-border insolvency proceedings.
Other proceedings
Restructuring proceedings
Requirements with and without self-administration, the minimum quota, the procedure up to the creditors’ vote and the effect of the confirmed restructuring plan.
Note This page presents the proceedings in a greatly simplified and abridged form. It is no substitute for comprehensive legal advice and representation in the individual case. The provisions of the Austrian Insolvency Code cited here can be found in their current version in the Federal Legal Information System (RIS).
Dr. Lukas Peichl, attorney at law in Vienna · As of October 2026