The International Comparative Legal Guide to:

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12th Edition

Corporate Recovery & Insolvency 2018

ICLGAli Budiardjo, Nugroho, ReksodiputroBarun Law LLCBlackOak LLCCampbellsDe Pardieu Brocas Maffei AarpiDhir & Dhir AssociatesDirican | Gozutok | BagciGallGilbert + TobinHannes Snellman Attorneys LtdINFRALEXINSOL InternationalKennedys Chudleigh Ltd.Kovács Réti Szegheő Law FirmLaw Office Waly & Koskinen Ltd.Lenz & StaehelinLoyens & Loeff LuxembourgMacfarlanes LLP

MathesonMiyetti LawNishimura & AsahiNoerr LLPPaul, Weiss, Rifkind, Wharton & Garrison LLPPirola Pennuto Zei & AssociatiSchindler Rechtsanwälte GmbHSOLCARGOSUE Abogados, S.L.P.Tatara & Partners Restructuring & Insolvency Law FirmThornton Grout Finnigan LLPWijn & Stael AdvocatenZamfirescu Racoți & Partners Attorneys at LawZepos & Yannopoulos

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General Chapter:

The International Comparative Legal Guide to: Corporate Recovery & Insolvency 2018

Contributing EditorJat Bains, Macfarlanes LLP

Sales DirectorFlorjan Osmani

Account DirectorOliver Smith

Sales Support ManagerToni Hayward

Sub EditorHollie Parker

Senior EditorsSuzie LevyCaroline Collingwood

Chief Operating OfficerDror Levy

Group Consulting EditorAlan Falach

PublisherRory Smith

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ISBN 978-1-912509-04-1ISSN 1754-0097

Strategic Partners

Country Question and Answer Chapters: 3 Australia Gilbert + Tobin: Dominic Emmett & Alexandra Whitby 8

4 Austria Schindler Rechtsanwälte GmbH: Martin Abram & Florian Cvak 15

5 Bermuda Kennedys Chudleigh Ltd.: Alex Potts QC & Nick Miles 21

6 Canada Thornton Grout Finnigan LLP: Leanne M. Williams & Puya J. Fesharaki 30

7 Cayman Islands Campbells: Guy Manning & Guy Cowan 37

8 England Macfarlanes LLP: Jat Bains & Paul Keddie 44

9 Finland Law Office Waly & Koskinen Ltd.: Tuomas Koskinen & Sami Waly 50

10 France De Pardieu Brocas Maffei Aarpi: Joanna Gumpelson & Philippe Dubois 56

11 Germany Noerr LLP: Dr. Thomas Hoffmann & Isabel Giancristofano 63

12 Greece Zepos & Yannopoulos: Emmanuel Mastromanolis & Danai Eirini Falconaki 69

13 Hong Kong Gall: Nick Gall & Ashima Sood 78

14 Hungary Kovács Réti Szegheő Law Firm: Dr. Eniko Vida & Dr. Attila Kovács 84

15 India Dhir & Dhir Associates: Alok Dhir 89

16 Indonesia Ali Budiardjo, Nugroho, Reksodiputro: Theodoor Bakker & Herry Kurniawan 97

17 Ireland Matheson: Tony O’Grady & Karen Reynolds 102

18 Italy Pirola Pennuto Zei & Associati: Massimo Di Terlizzi 109

19 Japan Nishimura & Asahi: Yoshinori Ono & Hiroshi Mori 116

20 Korea Barun Law LLC: Thomas P. Pinansky & Joo Hyoung Jang 123

21 Luxembourg Loyens & Loeff Luxembourg: Anne-Marie Nicolas & Véronique Hoffeld 130

22 Mexico SOLCARGO: Fernando Pérez Correa & F. Abimael Hernández 135

23 Netherlands Wijn & Stael Advocaten: R.M. Vermaire & F.B. Bosvelt 141

24 Nigeria Miyetti Law: Jennifer Douglas-Abubakar & Oluwole Olatunde 147

25 Poland Tatara & Partners Restructuring & Insolvency Law Firm: Karol Tatara & Mateusz Kaliński 153

26 Romania Zamfirescu Racoți & Partners Attorneys at Law: Stan Tîrnoveanu & Cătălin Guriță-Manole 158

27 Russia INFRALEX: Artem Kukin & Stanislav Petrov 163

28 Singapore BlackOak LLC: Ashok Kumar & Darius Tay 169

29 Spain SUE Abogados, S.L.P.: Antonia Magdaleno Carmona & Julián Chamizo Renau 176

30 Sweden Hannes Snellman Attorneys Ltd: Paula Röttorp & Carolina Wahlby 180

31 Switzerland Lenz & Staehelin: Tanja Luginbühl & Dr. Roland Fischer 186

32 Turkey Dirican | Gozutok | Bagci: Gokben Erdem Dirican 194

33 USA Paul, Weiss, Rifkind, Wharton & Garrison LLP: Alan W. Kornberg & Elizabeth R. McColm 201

2 Resolving Insolvency the World Bank Way – Jat Bains & Paul Keddie, Macfarlanes LLP 4

Editorial Chapter: 1 INSOL International – An Overview – Adam Harris, INSOL International 1

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Chapter 4

Schindler Rechtsanwälte GmbH

Martin Abram

Florian Cvak

Austria

not sufficient to satisfy all of the creditors and a business forecast shows that the debtor is likely to become illiquid within a reasonably predictable period; usually at least the current and the following financial year are considered for such a test. If a debtor is illiquid or insolvent, the managing directors have to file for the opening of insolvency proceedings without undue delay; however, no later than within 60 days; failure to meet this obligation exposes the managing directors to civil and criminal liability, as follows: In case of such delays, the managing directors will be liable to all creditors for the damages caused by such delay. Existing creditors, i.e. creditors who had a claim against the debtor before the opening of the insolvency proceedings, are entitled to claim quota damages, i.e. the difference between the quota they would have received in case of a timely filing and the lower quota they received because of the delayed filing. New creditors, i.e. creditors who became creditors of the company after the point in time when management would have been obliged to file, will be entitled to be reimbursed for the negative interest, as they would have most likely not have contracted with the debtor had its management already filed for insolvency.Criminal liability can occur under several circumstances, most notably in cases of grossly negligent encroachment of creditors’ interests, preferential treatment of creditors, withholding of social security payments and fraudulent intervention with creditors’ claims.

2.2 Which other stakeholders may influence the company’s situation? Are there any restrictions on the action that they can take against the company? For example, are there any special rules or regimes which apply to particular types of unsecured creditor (such as landlords, employees or creditors with retention of title arrangements) applicable to the laws of your jurisdiction?

Shareholders or members of the supervisory board of the debtor (if any) are not entitled to file for the opening of insolvency proceedings. If they exert their influence to induce management not to file for the opening of proceedings, this may expose a stakeholder to claims for damages for contributing to a delay of the filing.Creditors are entitled to (and frequently do) file for the opening of insolvency proceedings; however, they can only apply for the opening of bankruptcy proceedings, and not for the opening of in-court restructuring proceedings. Creditors which have ongoing contractual relationships with the debtor may be barred from terminating such contracts in in-court restructuring proceedings, if such contracts are vital for the restructuring of the debtor (see question 3.5). Otherwise, there are no special types of rules or regimes applying to particular types of unsecured creditors.

1 Overview

1.1 Where would you place your jurisdiction on the spectrum of debtor to creditor-friendly jurisdictions?

Austria is generally considered a creditor-friendly jurisdiction, as it does not provide for UK or US styles of restructuring proceedings.

1.2 Does the legislative framework in your jurisdiction allow for informal work-outs, as well as formal restructuring and insolvency proceedings, and to what extent are each of these used in practice?

Austrian law allows for both informal work-outs as well as (within the framework of the Austrian Insolvency Code) formal restructuring and insolvency proceedings, all of which are used in practice. The Austrian Insolvency Code provides for three types of insolvency proceedings, namely: ■ restructuring proceedings with self-administration (where the

management of the debtor retains control over the day-to-day business);

■ restructuring proceedings without self-administration (where the court-appointed administrator takes control over the day-to-day business); and

■ bankruptcy proceedings (where the court-appointed administrator takes control over the debtor with the aim to realise all assets to pay off the creditors).

The following chapter solely deals with work-outs, restructuring and insolvency proceedings of corporate entities, and not individuals.

2 Key Issues to Consider When the Company is in Financial Difficulties

2.1 What duties and potential liabilities should the directors/managers have regard to when managing a company in financial difficulties? Is there a specific point at which a company must enter a restructuring or insolvency process?

Managing directors are obliged to timely file for insolvency if the debtor is considered “insolvent” according to the Austrian Insolvency Act, i.e., if it is illiquid or over-indebted. A debtor is illiquid if it cannot settle the liabilities due – known but not due liabilities are not considered – and this is not just a temporary occurrence. A debtor is over-indebted if its assets – based on their liquidation value – are

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Additionally, the Austrian Reorganisation Act also provides – at least in theory – provisions for the restructuring of a company in financial difficulty. However, these provisions have little practical relevance, as the completion of such procedure requires the consent of all creditors.Austrian law does not contain any special rules on pre-packaged sales or debt-for-equity swaps. For in-court restructuring proceedings, creditors can influence the process through threatening to withhold their consent to the restructuring plan. The restructuring plan must be approved by simple majority (by headcount) of the insolvency creditors present at the restructuring plan hearing (Sanierungsplantagsatzung) who must represent at least 50 per cent of the outstanding unsecured debt represented at the hearing and be confirmed by a decision of the court. Insolvency creditors who have acquired their claims after the opening of the proceedings have no voting right (unless they acquired the claim based on an agreement entered into prior to the opening of the proceedings). In principle, the restructuring plan must treat all insolvency creditors equally (Paritätsprinzip) unless (where a group of insolvency creditors is concerned) unequal treatment is approved by a simple majority (by headcount) of the affected insolvency creditors present at the restructuring plan hearing, who must represent at least 75 per cent of the affected insolvency claims represented at the hearing or (where an individual creditor is concerned) the individual creditor has granted his explicit consent. The court decision confirming the restructuring plan releases the debtor from his obligation to pay insolvency creditors in excess of the agreed quota. If the debtor defaults and fails to come current during the requisite cure period, the released claims are reinstated and become immediately due.Shareholders also have some (albeit less formalised) influence on the process; typically, the debtor will require additional shareholder funding to (a) satisfy the estate claims during the proceedings, and (b) fulfil the payment obligations pursuant to the restructuring plan. As opposed to creditors, the Austrian Insolvency Code does not provide for a (creditor-initiated) shareholder cramdown.

3.3 What are the criteria for entry into each restructuring procedure?

An in-court restructuring process can only be opened by the competent insolvency court based on an application by the debtor; in case a creditor files for the opening of bankruptcy proceedings, the debtor has the option to request that such proceedings are opened as restructuring proceedings. The debtor’s application for in-court restructuring proceedings must include a restructuring plan (Sanierungsplan), which must provide (i) that the rights of secured creditors (that is, rights of creditors holding a property interest in an asset in the estate to request return of the asset (Aussonderungsgläuber) and the rights of creditors (Absonderungsgläubiger) holding a security interest in an asset to the proceeds of enforcement into that asset) will not be affected, (ii) full payment of all estate claims (Masseforderungen) (these are, ranked in order of practical importance, claims for labour, services and goods furnished to the estate post-filing, the costs of the proceedings (including the remuneration and reimbursement awarded to the creditor’s committee and the Special Creditors’ Rights Protection Associations), any monies advanced by a third party to cover the initial costs of the proceedings (to avoid a dismissal of the filing in limine), and the fees of the administrator), as well as (iii) an offer to pay at least 20 per cent (or 30 per cent if self-administration is requested) of the claims filed by insolvency creditors, i.e. other (unsecured) creditors that were not contested

2.3 In what circumstances are transactions entered into by a company in financial difficulties at risk of challenge? What remedies are available?

Court-appointed insolvency administrators can (and frequently do) challenge before the insolvency court transactions undertaken by the debtor prior to the opening of the proceedings during certain “suspect periods” (not applicable for restructuring proceedings under self-administration). For example, transactions in which the debtor intentionally puts certain creditors at a disadvantage relative to one or several other creditors who knew of such an intention can be challenged when made within a suspect period of 10 years before the opening of the proceedings. In other cases, suspect periods range between six months and two years. Cases include the transfer of assets without due consideration (two years), provision of security or settlement of an obligation not due at the time (one year), and business transactions with the insolvent debtor when the counterparty knew or should have known of its insolvency (six months).

3 Restructuring Options

3.1 Is it possible to implement an informal work-out in your jurisdiction?

Out-of-court restructurings can only be implemented pre-insolvency or within the 60-day grace period (that is, management has an obligation to file for the opening of insolvency proceedings without undue delay but in any event within 60 days of insolvency; during the 60-day grace period, management may make reasonable efforts to restructure the debtor or prepare an application for restructuring proceedings). The obvious advantage of an out-of-court restructuring is that the proceedings are not registered in the insolvency database (as would be the case with in-court restructuring proceedings), and thus it is less likely to become public. The other advantage is that out-of-court restructurings tend to offer more flexibility and can be implemented quicker as long as all relevant parties contribute. The downside is that out-of-court restructurings only capture the contracting parties (and not all insolvency creditors) and in certain situations there may be a risk of voidance where an agreement is entered into at a time where the debtor is already insolvent and the effect thereof is to potentially reduce the value of the estate.

3.2 What formal rescue procedures are available in your jurisdiction to restructure the liabilities of distressed companies? Are debt-for-equity swaps and pre-packaged sales possible? To what extent can creditors and/or shareholders block such procedures or threaten action (including enforcement of security) to seek an advantage? Do your procedures allow you to cram-down dissenting stakeholders?

As mentioned under question 1.2 above, the Austrian Insolvency Code provides for three types of formal insolvency proceedings. The two types of restructuring proceedings (with or without self-administration by the debtor) are aimed at ensuring the continuing survival of the debtor by providing a restructuring of (some of his) financial obligations. On the other hand, bankruptcy proceedings (see question 1.2 above) are aimed at realising the assets of the estate and distributing the proceeds to the debtor’s creditors. In case restructuring proceedings are not successful, they are transformed into bankruptcy proceedings.

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3.6 How is each restructuring process funded? Is any protection given to rescue financing?

As mentioned above, the debtor needs to provide proof of funds to cover its post-petition payment obligations for a period of 90 days following the application. There are no restrictions on the sources of funding, so funds can be provided by shareholders, through operating cash flows, through existing unused financing lines or through new debt financing.

4 Insolvency Procedures

4.1 What is/are the key insolvency procedure(s) available to wind up a company?

There are two types of proceedings to wind up a company, namely (i) a voluntary liquidation, and (ii) bankruptcy proceedings pursuant to the Austrian Insolvency Code.

4.2 On what grounds can a company be placed into each winding up procedure?

A voluntary liquidation can only be initiated by a resolution of the shareholders of a company. In such resolution, a special suffix is added to the company name to denote that the company is in wind-down. Both the resolution and the change of the company name have to be notified to the Companies Register. For the preconditions of opening bankruptcy proceedings, see question 2.1 above. As with in-court restructuring proceedings, the proceedings are opened by an edict of the competent insolvency court. Please note that the debtor has the option to apply for a conversion of bankruptcy proceedings into restructuring proceedings, provided that he can show that the preconditions are met.

4.3 Who manages each winding up process? Is there any court involvement?

A voluntary liquidation is managed either by (all or some of) the managing directors of the company or by newly appointed liquidators, as decided by the company’s shareholders. Court involvement for a voluntary liquidation is limited; the liquidators have to make certain filings with the Companies Register, which are only subject to a limited review by the court. The liquidators will have to terminate all existing contractual relationships of the company, settle all outstanding claims and repay all debt of the company before the company can be finally wound down.For bankruptcy proceedings, the process is similar to the process for in-court restructuring proceedings; the court will appoint an administrator who will take care of the liquidation of the assets of the debtors and the payment of the quota to the insolvency creditors.

4.4 How are the creditors and/or shareholders able to influence each winding up process? Are there any restrictions on the action that they can take (including the enforcement of security)?

In a voluntary liquidation, the liquidators need to pay-off all existing creditors of the company, so the creditors are in a strong position to demand full repayment of their claims. Shareholders still retain their influence (to the extent allowed by law), even after they decided to put the company in liquidation.

by the administrator, within two years of the approval of the restructuring plan. Furthermore, the debtor must provide evidence in the application that he is able to fund the estate claims for a period of 90 days following the application.

3.4 Who manages each process? Is there any court involvement?

Out-of-court restructurings are managed by the company itself without any court involvement.In restructuring proceedings with self-administration, the debtor retains control over the estate. The administrator’s approval is required only for matters outside the ordinary course of business. However, the administrator may also veto matters which fall within the ordinary course of business. In restructuring proceedings without self-administration, control over the estate is transferred to the administrator.Following the receipt of an application for restructuring proceedings, the court will issue a formal edict opening the proceedings. In such edict, the court will determine the type of proceedings, appoint the administrator and set dates/deadlines for (i) the report hearing (where the administrator has to present his or her report of the status of the debtor), (ii) the first creditors’ convention, (iii) the filing of insolvency claims, (iv) the examination hearing (where the filed insolvency claims are examined), and (v) the restructuring plan hearing (where the creditors will take a vote on the proposed restructuring plan). The report hearing and the first creditors’ convention typically take place within 14 days of the publication of the edict and the examination hearing within 60 to 90 days. Following the acceptance of the restructuring plan, the debtor will (again) be vested with all rights in and to the estate. However, the restructuring plan may also provide that a trustee is appointed to (i) supervise the fulfilment of the restructuring plan by the debtor (in which case supervision is similar to that during self-administration proceedings), (ii) take over the estate (übernehmen) with the mandate to fulfil the restructuring plan (Sanierungstreuhand), or (iii) liquidate the estate (Liquidationstreuhand).

3.5 What impact does each restructuring procedure have on existing contracts? Are the parties obliged to perform outstanding obligations? Will termination and set-off provisions be upheld?

Out-of-court restructuring proceedings do not have any impact on existing contracts. Thus, as the debtor will at this point most likely be in default under certain of its financing arrangements, it is customary for banks to agree on a standstill for the duration of such out-of-court restructuring. It has to be borne in mind that the 60-day filing obligation of the debtor’s management still applies in this case.For in-court restructuring proceedings, the Insolvency Act provides for a six-month moratorium for vital contracts, which limit a contracting party’s ability to terminate for good cause. Default on payments and deterioration of the financial or economic state of the debtor is not considered good cause. The most notable exception to that rule is funding commitments under credit facilities.Subject to this restriction, termination and set-off provisions will still be upheld; however, set-off in an insolvency setting is modified compared to the general rules of the Austrian Civil Code, as claims of creditors are converted to monetary claims upon the opening of the insolvency proceedings, and thus can be set off at an earlier point. However, claims arising post-petition cannot be set off against claims of the debtor.

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Insolvency claims: insolvency claims are claims by unsecured creditors of the debtor relating to the pre-petition period. Such claims needs to be filed with the court (within a period of time set forth in the opening edict of the proceedings) and can be contested by the administrator. Subordinated claims: claims of shareholders or claims based on equity replacing services to the debtor can only be satisfied if all other of the aforementioned claims have been satisfied in full.

4.7 Is it possible for the company to be revived in the future?

Following the completion of the bankruptcy proceedings, the (Austrian) debtor is deleted from the Companies Register. To the extent additional assets of the debtor are discovered at a later point in time, the company could be revived for as long as it takes to distribute such additional assets to the creditors.

5 Tax

5.1 What are the tax risks which might apply to a restructuring or insolvency procedure?

The opening of a restructuring or insolvency procedure itself does not give rise to tax risks or liabilities. In an out-of-court restructuring, any formal subordination or waiver of existing shareholder debt may lead to the debtor recognising a taxable gain, which – in most circumstances – can be offset against current losses or loss carry-forwards.For a voluntary liquidation to be finalised, the company will need to obtain a tax clearance certificate before it can be deleted from the companies register.

6 Employees

6.1 What is the effect of each restructuring or insolvency procedure on employees?

The opening of in-court restructuring or insolvency proceedings by itself does not affect the employees of the debtor.The insolvency administrator has special rights to terminate employment upon a partial or total shut down, only requiring the administrator to comply with the (mandatory) notice periods under statute and the applicable collective bargaining agreement (but not longer contractual notice periods). A similar provision is available to a debtor in a restructuring with self-administration if he decides to close part of the business or unit, and continuing the employment of an employee engaged in that part of the business or unit would put the restructuring or the business at risk. Such a measure, however, requires the consent of the insolvency administrator.Please note that mass lay-offs in connection with restructuring or insolvency proceedings require a 30-day pre-notification of the competent branch of the Austrian Labour Market Service. During the aforementioned 30-day notice period, no termination can be effectively announced – which means that the notice period is de facto prolonged by that period.

In bankruptcy proceedings, the shareholders do not have any noticeable degree of influence on the proceedings. They are, however, entitled to bid for assets of the debtors in the same way as other creditors. The influence of unsecured creditors is also limited in bankruptcy proceedings; certain decisions by the administrator require the prior consent of the creditors’ committee, where the various creditors have voting rights depending on the amount of their (accepted) claims against the debtor.

4.5 What impact does each winding up procedure have on existing contracts? Are the parties obliged to perform outstanding obligations? Will termination and set-off provisions be upheld?

In a voluntary liquidation, the shareholder decision to put the company into liquidation does by itself not impact on the existing contracts of the company. Typically, counterparties of the company will have a contractual right to terminate their contract for cause if the company is put into liquidation. Absent the company and its counterparty exercising such termination right or reaching a different agreement, the outstanding obligations under such contracts have to be fulfilled. Set-off provisions (whether by contract or by statute) will typically not be affected by a decision to put a company into voluntary liquidation.In bankruptcy proceedings, the insolvency administrator may elect to assume or withdraw from contracts which neither party has fully performed at the time of the opening of the insolvency proceedings. If the contract is assumed, further claims of the contracting party are (preferred) estate claims (Masseforderungen), whereas in case of a withdrawal, any resulting (damage) claims of the contracting party are ordinary insolvency claims. Where the estate is the tenant, the insolvency administrator (not the landlord) can terminate the lease, in which case he must only observe the statutory notice period or a shorter contractual notice period (but is not bound by a longer contractual notice period). The six-month moratorium referred to under question 3.5 above may also apply in case of bankruptcy proceedings if the administrator has sufficient funds to pay the estate claims and can show that keeping such contracts in place will likely enhance the chances of successfully selling the business enterprise of the debtor during the bankruptcy proceedings for higher sales proceeds. Where the estate is the landlord, no special termination rights exist. As regards set-off provisions, please see question 3.5 above.

4.6 What is the ranking of claims in each procedure, including the costs of the procedure?

All Austrian in-court restructuring and insolvency proceedings differentiate between certain types of claims, which are ranked in the following order: Secured claims: claims of creditors holding a property interest in an asset in the estate to request return of the asset (Aussonderungsgläuber) and creditors holding a security interest in an asset to the proceeds of enforcement into that asset (Absonderungsgläubiger). Estate claims: estate claims (Masseforderungen), which consist of (i) costs of the proceedings, (ii) costs for the administration of the estate, (iii) costs for post-petition salaries, (iv) costs for terminating certain types of employment agreements, (v) claims for the fulfilment of agreements not terminated by the administrator, (vi) claims based on acts of the administrator, (vii) unjust enrichment claims against the estate, and (viii) compensation claims by the creditor protection organisations.

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7.3 Do companies incorporated in your jurisdiction restructure or enter into insolvency proceedings in other jurisdictions? Is this common practice?

Generally, Austrian companies tend to restructure or enter into insolvency proceedings in Austria. As opposed to Germany, where several debtors have tried to open insolvency proceedings in the UK in the recent past, we have not observed such attempts in Austria.

8 Groups

8.1 How are groups of companies treated on the insolvency of one or more members? Is there scope for co-operation between officeholders?

Since the 2017 amendment, the Austrian Insolvency Code incorporates the provisions of Council Regulation (EC) No 848/2015 regarding insolvency proceedings for groups of companies. These provisions basically provide for increased coordination of the insolvency proceedings for the various group entities.

9 Reform

9.1 Have there been any proposals or developments in your jurisdiction regarding the use of technology or reducing the involvement of the courts in the laws of your jurisdiction, which are intended to make insolvency processes more streamlined and efficient?

There have not been any such proposals or developments in Austria.

9.2 Are there any other governmental proposals for reform of the corporate rescue and insolvency regime in your jurisdiction?

There are currently no proposals for reform.

7 Cross-Border Issues

7.1 Can companies incorporated elsewhere use restructuring procedures or enter into insolvency proceedings in your jurisdiction?

Under the Austrian Insolvency Code, companies registered outside of Austria (but in another EU Member State) can enter into insolvency proceedings in Austria if their centre of main interest (COMI) is in Austria and no insolvency proceedings have been opened in respect of such debtor in another EU Member State as a main proceeding according to Council Regulation (EC) No 848/2015. Companies registered outside the EU can in principle also enter into insolvency proceedings in Austria, provided that their COMI is in Austria; in this case, the Austrian Insolvency Code provides for a rebuttable assumption that the COMI of a non-Austrian debtor is located in its country of registration.

7.2 Is there scope for a restructuring or insolvency process commenced elsewhere to be recognised in your jurisdiction?

Insolvency proceedings that were opened as main proceedings in another EU Member State have to be recognised in Austria pursuant to Council Regulation (EC) No 848/2015. For foreign insolvency proceedings opened outside of EU Member States, the Austrian Insolvency Code provides for a recognition of such proceedings provided that the COMI of the debtor is located in the country where the insolvency proceedings were opened and the foreign insolvency proceeding is comparable to an Austrian insolvency proceeding. Please note that the Insolvency Code does not provide for a formal recognition procedure, such as a Chapter 15 filing in the United States; thus, the question of the effects for such foreign insolvency proceedings will be decided by Austrian courts on a case-by-case basis, primarily when creditors try to initiate enforcement actions against the debtor in Austria.

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Schindler Rechtsanwälte is an Austrian law firm specialising in transactional work with extensive experience in the fields of M&A, private equity, finance, real estate, corporate, tax, securities law and restructurings. We regularly counsel leading national and international financial investors and their investments in corporate businesses, as well as financing banks.

Martin Abram is a founding partner of Schindler Rechtsanwälte. Prior to that, Martin was a partner at Wolf Theiss. His practice focuses on corporate law, corporate restructurings, mergers & acquisitions and project and real estate financing transactions. He regularly counsels financially troubled companies, their shareholders, management and supervisory boards as well as financing banks and other creditors in dealings with distressed debtors.

Martin AbramSchindler Rechtsanwälte GmbHTuchlauben 13A-1010 ViennaAustria

Tel: +43 1 512 2613 300Email: martin.abram@schindlerattorneys.comURL: www.schindlerattorneys.com

Florian Cvak is a founding partner of Schindler Rechtsanwälte. Prior to that, he co-headed the private equity practice of Schönherr. His practice focuses on private equity, mergers & acquisitions, general corporate law and corporate finance transactions. He frequently assists financial sponsors and corporates on their investments in distressed debt and businesses in distress, and regularly advises shareholders, management and supervisory boards of financially troubled companies.

Florian CvakSchindler Rechtsanwälte GmbHTuchlauben 13A-1010 ViennaAustria

Tel: +43 1 512 2613 500Email: florian.cvak@schindlerattorneys.comURL: www.schindlerattorneys.com

Schindler Rechtsanwälte GmbH Austria

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