Shareholders of Austrian limited liability companies ("GmbH") often stipulate the right to purchase the shares of co-shareholders in certain events. These "share purchase rights" (Aufgriffsrechte) entitle the remaining shareholders to acquire the share of a shareholder when a contractually defined event (Aufgriffsfälle), like insolvency or the death of a shareholder, occurs. Often these rights are laid down in articles of association or a separate shareholders' agreement (Syndikatsvertrag). They are generally qualified as option rights.

After a delay of more than a year, an Act on Preventive Restructuring (the "Act") implementing the EU directive on preventive restructuring frameworks finally became effective in the Czech Republic on 23 September 2023. The long-awaited Act introduced a brand-new legal tool enabling viable enterprises in temporary financial distress to achieve restructuring outside insolvency proceedings. It is a voluntary and flexible process requiring cooperation with creditors, but not necessarily with all of them.

Who can use it?

After a delay of more than a year, an act on preventive restructuring (the "Act") implementing the EU directive on preventive restructuring frameworks finally became effective in the Czech Republic on 23 September 2023. The long-awaited Act introduces a brand-new legal tool preventing the insolvency of viable enterprises in temporary financial distress.

What is preventive restructuring and why use it?

As of 17 July 2021 the EU restructuring directive¹ was implemented in Austria by the new Austrian Restructuring Code (ReC). The ReC allows debtors to enter formal restructuring proceedings before actually becoming insolvent. To minimise the disruption to debtor's operations, the proceedings are not public, a ban on enforcement of collateral can be implemented and the rights of counterparts to amend or terminate existing contracts are significantly curtailed.

The Czech Ministry of Justice recently published a bill on preventive restructurings (the "Bill") implementing the directive on preventive restructuring frameworks which will introduce a brand-new legal tool preventing the insolvency of viable enterprises in temporary financial difficulties.

The Bill is now heading to the legislative process and should become effective from July 2022. Although it may still undergo some changes, it is already obvious that it will revolutionise Czech insolvency law.

Editorial | Restructuring Directive  

Am 16.06.2021 wurde von der Bundesregierung der Entwurf der neuen Restrukturierungsordnung (ReO), mit der die RL (EU) 2019/1023 (RestrukturierungsRL) umgesetzt wird, beschlossen (siehe hier).

The amendment to the Business Corporations Act effective from 1 January of this year (the "Amendment") brings, among other things, a significant change in the liability of members of a statutory body, which will affect the current topic of insolvency.

Members of a statutory body may now be liable in the event of insolvency for a much wider range of misconduct than was the case until the end of 2020. And not only them. The Amendment explicitly widens the range of persons to whom the new liability rules will apply.

Am 23.02.2021 wurde der lang erwartete Entwurf der Restrukturierungsordnung veröffentlicht. Mit dem Entwurf soll die Richtlinie (EU) 2019/1023 (RestrukturierungsRL) in Österreich umgesetzt werden.

Der Entwurf in 5 Fragen

Warum?

Erleichterung der Sanierung durch Möglichkeit einer gerichtlich bestätigten Mehrheitsentscheidung der Gläubiger.

Wer?

The coronavirus pandemic has made life complicated for almost all businesses, especially from the financial point of view. Businesses thus face an increased risk of bankruptcy and subsequent insolvency proceedings.

To help with this challenging situation, an amendment to the Insolvency Act as part of the "Lex Covid" was adopted. Lex Covid became effective on 24 April 2020.

Initiation of insolvency proceedings

Creditor's right to file an insolvency petition