This year, thanks to corona aid, significantly fewer proceedings have been opened with companies and private individuals.
The credit insurer Acredia expects an increase in insolvency applications from the third quarter.
The number of bankruptcies fell in the previous year thanks to state corona aid despite the economic crisis. For this year, the Alpenländischer Kreditorenverband (AKV) expects a wave of insolvencies from the second half of the year at the latest, both for companies and private individuals. Due to the “extreme backlog of insolvencies and the increase in indebted households as a result of the loss of thousands of jobs, it is certain that Austria will face a wave of insolvencies.”
The assessment of the extent is made more difficult by the fact that from the middle of the year two planned reforms of the bankruptcy and enforcement law are to come into force, “which will have a massive effect on the incidence of bankruptcies,” said the AKV in a press release. It is expected that the deferrals of public charges and contributions will not be extended beyond March 31, 2021.
According to the AKV, in the planned reform of the enforcement law, an obvious insolvency should be taken up and published in the enforcement proceedings. Then the creditors should be referred to bankruptcy proceedings. In the event of the implementation of the proposed law, for which a draft is already available, an increase in applications from creditors can be expected.
In the case of private bankruptcies, a new total enforcement procedure is to be introduced, which can be opened more easily upon request by the creditor even in the absence of cost-covering assets. As a result, openings via creditor applications would increase massively and could have a similar significance as with company insolvencies, according to the AKV.
Up until now, personal bankruptcies have mainly been opened on the debtor's own initiative. In the case of companies, around half of the proceedings are opened via applications from creditors, primarily from the public sector. In the long term, a 50 percent increase can also be expected in the area of private bankruptcies, according to the AKV. The second major legislative proposal is the implementation of the EU restructuring directive, which, among other things, deals with the deadlines for debt relief.
After the discontinuation of state measures from the second half of the year, the AKV expects company bankruptcies to rise by up to 15 percent compared to the level of 2019, if the deferrals are not extended beyond March 31, 2021.
In the Corona year 2020, the number of company bankruptcies fell by 41.4 percent to 1,784 proceedings, according to the AKV. Overall (including proceedings rejected for lack of cost coverage) they fell by 38.8 percent to 3,175. In the case of personal bankruptcies, there was a decrease of 23.6 percent to 7,256 opened debt settlement procedures. The number of proceedings has gradually decreased since the first lockdown and the state support measures such as deferrals, no insolvency applications by the public sector and Corona short-time work.
The liabilities for company bankruptcies increased from 2.2 billion to 5.2 billion euros in the previous year, and even with the adjustment of congruent claims, the order of magnitude would be around 4 billion euros. The largest bankruptcy in terms of liabilities was the Commerzialbank Mattersburg – its liabilities of 811 million euros and the 633 million euros of its owners' cooperative were largely identical claims.
In relation to the affected employees, Kremsmueller Industrieanlagenbau (593 employees) and Kremsmueller Industrieservice (528 employees) were the largest insolvencies. Behind were the ATB Spielberg (396 employees) and the textile retailer Colloseum Retail (329 employees). In all major bankruptcies, Corona is not “the cause of insolvency”.
In private insolvencies, liabilities of EUR 1.02 billion were below the 2019 figure of EUR 1.2 billion. The average debt per case rose from 132,500 to 141,300 euros. With regard to the expected claims registrations of the two Commerzialbank board members, it is to be expected that the liabilities in 2020 will have to be corrected in the course of the year and may reach or exceed the record value of 1.62 billion euros from 2018, so of the AKV.
