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Trends and regulatory climate

TrendsWhat is the current state of the lending market in your jurisdiction and have any new trends emerged over the last 12 months?Austria

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Asset classes used as collateral for security

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Enforcement

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Structuring a lending transaction

The conundrum evolves

The right to set-off claims and obligations in insolvency proceedings is an important tool for creditors in order to protect themselves against the insolvency risk of a contractual counterparty. This article gives a short overview of the rules for set-off in insolvency proceedings in Austria and certain CEE jurisdictions not taking into account special provisions for close-out netting and similar transactions.

Austria

Set-off in insolvency proceedings

Introduction

As of 1 January 2015, the Au;trian criminal procedure code ("StPO") ctifferentiates between      suspects     (Verdachtiger)      and

subJect    to    loose    and    unsubstantiated

Insolvency lawyers frequently encounter problems in relation to goods that are purchased under a reservation of title and the assertion of resulting rights to separate these goods from the debtor's estate. In particular, the obligation to provide notice of withdrawal from the contract regularly raises issues. A recent example of Austrian case law demonstrates that the absence of an express notice of withdrawal can also be problematic.

Basic principles

As can be read in the media, reorganization proceedings were opened on the assets of the Kärntner Landes- und Hypothekenbank-Holding.

The reason for the application for initiation of reorganization proceedings is the liability by virtue of law of the applicant for all current and future liabilities of the bad bank HETA Asset Resolution AG, universal successor of Hypo Alpe-Adria-Bank International AG. 

The Austrian “Bundesgesetz über Sanierungsmaßnahmen für  die HYPO ALPE-ADRIA-BANK INTERNATIONAL AG” (HaaSanG), published on 31 July 2014 in the Austrian Federal Law Gazette and implemented in August 2014 by the Austrian government, paved the way for the establishment of Heta Asset Resolution AG (Heta) as a wind-down vehicle to assume and manage large parts of the assets of the failed Austrian bank, Hypo Alpe-Adria Bank international AG (HAA).