In-depth information on current market conditions and insolvency case developments
This detailed overview of insolvency law, metrics and proceedings in Austria provides both practitioners and business readers with a clear picture of the underlying legal framework and policy, along with a sharp picture of ongoing developments in Austria, including the context of insolvency proceedings with regard to the effects of the global pandemic.
- Insolvency law, policy and procedure
- Insolvency metrics for 2020 and the first two quarters of 2021
- Plenary insolvency proceedings
- Ancillary insolvency proceedings
The full extent of the pandemic is not yet clear
While the effects of Covid-19 have been felt throughout the business community and the economy as a whole in Austria, metrics on insolvencies show something of a paradox due to government support measures. Predicting the long-term impacts, particularly with regard to insolvencies, remains challenging at this point.
The Covid-19 crisis will continue to have impact on the number of insolvencies in Austria. While it is not expected that Austria will be hit by a wave of insolvencies, it is expected that in the autumn of 2021 the weekly insolvencies will increase to the level of the time prior to the crisis. For 2022, it is expected that numbers will in general return to the level of the time prior to the crisis.
Metrics for 2020
In 2020, corporate insolvencies decreased significantly. A total of 3,304 insolvent companies were registered in 2020, which is less than 39.5 per cent compared to the 2019 figure. The number of proceedings opened dropped by 40.7 per cent to 1,804 cases, while the number of proceedings not opened due to lack of assets fell by 37.7 per cent to 1,230.
Overall, 16,300 employees (compared to 2019, this number dropped by only 5.2 per cent) were affected by insolvencies of their employers. The estimated insolvency debts increased considerably by 80.1 per cent to €3.057 billion. In 29 cases, the debt was more than €10 million.
Metrics for Q1/Q2 2021
The analysis of corporate insolvencies for the first half of 2021 resembles a paradox. The current figures on corporate insolvencies show a total drop of roughly 45 per cent (including proceedings that have not been opened due to a lack of assets) and a drop of 36 per cent in proceedings opened compared with the first half of 2020, which is the lowest number in more than 40 years.
Yet, these figures do not reflect the actual situation; rather, this is mainly the result of governmental measures to minimise the economic effects of the global pandemic. These measures taken make it possible to postpone insolvency applications and might have negative effects for creditors.18 In the long term, it remains to be seen whether governmental measures will in fact help the Austrian economy to recover from the effects of the covid-19 crisis.
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Originally published in the Insolvency Review by The Law Reviews.
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