A giant leap forward? The new draft for a restructuring code in Austria

On 22 February 2021, the ministerial draft of the Restructuring and Insolvency Directive Implementation Act was published, which marks a turning point for pre-insolvency restructuring law in Austria. The code allows the restructuring of a company even against the will of individual creditors, which could in the past lead to the failure of a consensual, out-of-court restructuring.

The law is the eagerly awaited implementation of the Restructuring Directive. In addition to the introduction of a new Restructuring Code, inter alia the Insolvency Code is to be amended. The review period ended on 6 April 2021; it is expected to come into force in the third quarter of 2021.

It remains to be seen whether the new law will be able to fulfil its purpose and to mitigate the impending wave of insolvencies.