Vienna. What will happen if the legal moratoriums now gradually end? While large parts of the economy are still stuck in lockdown or at best are allowed to dare to take small steps towards opening up? “I don't expect a bankruptcy tsunami,” said Ricardo-José Vybiral, head of the credit protection association, recently to the “press”. Banks will continue to defer credit claims. And health insurance and tax authorities will also be less inclined than usual to send companies into bankruptcy.
Because the tax authorities and social security are – as reported – privileged as creditors in corona-related installment agreements: the insolvency administrator cannot demand payments from them until the end of June 2022 if the company should go bankrupt. This is controversial among lawyers: On the one hand, it gives companies shaken by the crisis a grace period, which is a strong argument for it. On the other hand, it means unequal treatment compared to other creditors. And that is constitutionally questionable.
A model case can be expected sooner or later, says Alexander Isola, head of the insolvency and restructuring practice group at the Graf und Pitkowitz law firm. “And possibly also with an increase in insolvency applications from other creditors, such as suppliers or banks.”
But that is not the only risk: “It will mean that many tax debtors feel in a false sense of security,” warns lawyer Eberhard Wallentin. The first installment payment phase is followed by a “phase 2” until March 31, 2024, in which one can continue to hope for a deferment of payments with financial and social insurance. But these demands still persist; they hang over the company like a sword of Damocles. And at some point they will come due.
If the debtor has not really managed to recover economically by then, “this can all too easily lead to liability for the delay in bankruptcy,” warns Wallentin, and even criminal consequences are possible. In particular, this applies to managing directors or board members of a GmbH or AG: “They expose themselves to a not inconsiderable liability risk if they do not initiate insolvency proceedings in good time.” Not only in terms of liability law, but also in terms of orderly debt relief. “
Draft in the drawer
Isola and his colleagues Stefan Weileder and David Seidl see it similarly. They also warn of not inconsiderable liability risks for managing directors and board members. Because even now, as long as the Covid special rules still apply, an application for insolvency must be filed in the event of insolvency. In this respect, the legal exclusion of contestation could even become a “disservice” to managers, warn the restructuring experts. “Even more incomprehensible”, however, is something else: “That the legislature is apparently postponing the implementation of the EU directive on preventive restructuring frameworks until the last second.”
Specifically, it is about a new restructuring order that could become the lifeline for crisis-ridden, but viable companies. The implementation period for the directive (EU 2019/1023) ends on July 17, 2021, in Germany there has been an implementation law since December. “In Austria, too, there has long been a draft law, but there is obviously a problem with the political will,” says Isola.
The reason for this can only be speculated – after all, the law is part of the long overdue bankruptcy law reform package. And, as is well known, there is a controversial point here – the duration of debt relief for personal bankruptcies, specifically its possible shortening from five to three years.
Agreement with creditor classes
But what exactly would the economy get from the new restructuring process? “It opens up completely new opportunities for entrepreneurs,” explains Weileder. “For example, it can also be treated as a non-public procedure. In addition, the entrepreneur can limit himself to certain creditor classes, such as bank creditors or credit insurers. “
It is therefore no longer necessary to involve the suppliers or employees that are essential for the operation.
In this respect, it is similar to an out-of-court restructuring – but “combined with the possibility of judicial restructuring proceedings,” says Weileder. In particular, within the respective creditor class z. B. be voted on a haircut – a decision by a qualified majority is then binding for everyone. Financing that cannot be challenged should also be possible. This would z. B. Financing banks are on an equal footing with the currently beneficiary tax creditors.
Much is stipulated by Union law, but there is still scope for the national legislature. “It would be important, for example, to make it clear once and for all that the social security contribution creditors can and should also take part in judicial restructuring,” says Seidl. So far, this has been rejected, and restructuring plans could fail because of this. “Because of the often high arrears in contributions, the contribution creditors often have blocking minorities.”
According to the experts, innovative restructuring measures should also be anchored in the law. For example, the conversion of a creditor's claims into a participation (debt-equity swap) or the so-called restructuring split, in which profitable parts of the company are sold and the company receives funds. “Implementing the guidelines is like vaccination: many people urgently need them, everything should be done to ensure that they are implemented quickly,” says Isola. Because the new process could benefit those companies “that would operate positively under normal circumstances, but have got into difficulties through no fault of their own due to covid”.
The prerequisite for the restructuring will be that the company is still solvent. Over-indebtedness may exist, but the prognosis for continued existence – taking into account the planned restructuring measures – must be positive. And if not? Then in the end there is only the path to bankruptcy.
