An economic crisis does not necessarily mean the end of a company. The Austrian restructuring procedure offers the possibility to regulate existing liabilities within the framework of a court-confirmed restructuring plan and to create the economic basis for the continuation of the company.
 

Crucial factors are a viable restructuring concept, realistic financial planning, and demonstrable financing of the offered restructuring quota.
 

A successful restructuring therefore does not begin with the opening of court proceedings, but with careful economic preparation.
 

01 | Restructuring procedure with or without self-administration
 

Austrian insolvency law provides for two forms of restructuring proceedings. They differ in particular regarding the required minimum quota and the powers of the company management.
 

Restructuring procedure without self-administration
 

In a restructuring procedure without self-administration, a court-appointed insolvency administrator takes over the management of the insolvent assets. The restructuring plan must generally offer insolvency creditors a minimum quota of 20%, which must be fulfilled within a maximum of two years. The company management works with the insolvency administrator and provides the necessary economic information.
 

Restructuring procedure with self-administration
 

In a restructuring procedure with self-administration, the company management can generally remain capable of acting under the supervision of a court-appointed restructuring administrator. Their powers are subject to legal restrictions. Prerequisites include, among other things, a minimum quota of 30%, payable within a maximum of two years. In addition, extended documents must be submitted, in particular a restructuring plan, a financial plan, and a presentation of the funds required for the continuation of the company. Self-administration therefore requires particularly careful preparation and robust economic planning.
 

02 | Restructuring plan and restructuring quota
 

The restructuring plan forms the basis for the intended debt relief of the company. It specifies, in particular, what proportion of the insolvency claims should be fulfilled within what period of time. However, the statutory minimum quota alone does not determine the economic viability of the project. Of central importance are the amount of the relevant claims, the available financing resources, and the company's ability to actually make the intended payments.
 

Calculation of the restructuring quota
 

For a sound quota calculation, the following factors in particular must be taken into account:
 

• Amount and composition of insolvency claims

• Existing security and separation rights

• Available equity and possible external financing contributions

• Expected operating cash surpluses

• Scheduled payment dates and financing requirements

The quota calculation must be based on comprehensible economic assumptions and be coordinated with liquidity planning.
 

Acceptance and court confirmation
 

The eligible insolvency creditors vote on the restructuring plan according to the statutory majority rules. In principle, the majority of the eligible insolvency creditors present and more than half of the sum of the claims of the eligible insolvency creditors present are required. After acceptance by the creditors, the restructuring plan requires court confirmation.
 

03 | Economic viability of restructuring
 

Restructuring is only economically sensible if the continuation of the company is based on realistic and financeable assumptions.

For this, it is not enough to mathematically present the statutory minimum quota. The company must also be able to meet its ongoing obligations during the restructuring.
 

Liquidity planning
 

Liquidity planning shows which financial resources are likely to be available to the company during the restructuring period and which payment obligations must be met. In particular, ongoing operating expenses, expected incoming payments, necessary investments, and the intended quota payments are taken into account.
 

Earnings and continuation planning
 

Earnings planning maps the expected development of sales, costs, and operating results. It serves to assess the economic effects of planned restructuring measures and to examine the prerequisites for sustainable company continuation.
 

Financing the restructuring plan
 

The fulfillment of the restructuring plan can be made possible, for example, by operating surpluses, shareholder contributions, external financing, or the realization of non-essential assets. It is crucial that the intended financing sources are realistic, comprehensible, and timed to match the planned payments.
 
04 | INSOLVIA – Economic preparation of the restructuring procedure
 

INSOLVIA supports companies and their lawyers in the economic, financial, and organizational preparation of a restructuring procedure. The focus is on creating a structured restructuring file as part of the INSOLVIA APPLICATION FOLDER.

This includes, in particular, the preparation of the economic initial situation, the creation of financial and liquidity plans, the calculation of the intended restructuring quota, and the presentation of its financing.
 

The individual calculations and planning documents are coordinated with each other and brought together in a comprehensible documentation structure. On this basis, the economic prerequisites of the planned restructuring procedure can be assessed and the necessary documents for further legal processing can be provided. The legal drafting of the restructuring plan proposal, the legal review of the procedural requirements, and the court filing are carried out by the commissioned lawyer.
 
05 | Successful restructuring needs a sound foundation
 

Economic clarity. Realistic planning. Structured preparation. A restructuring procedure opens up perspectives when the economic prerequisites are carefully examined and the necessary measures are prepared in good time. INSOLVIA creates the documentary and mathematical basis on which sound decisions about the further course of action can be made.

Note: The information provided is for general orientation and does not replace individual legal or tax advice. The actual prerequisites and chances of success of a restructuring procedure must be assessed on a case-by-case basis.