Like some other jurisdictions Austrian law does not provide a concrete legal framework for an out-of-court debt restructuring. However, the law does not prohibit the management of a company for extra-judicial restructuring; on the contrary, it grants 60 days for extra-judicial restructuring efforts if there is a reason for insolvency (inability to pay, over-indebtedness without a positive prognosis).
Obligation to file for insolvency
On the one hand, 60 days is a relatively short period of time; on the other hand, these 60 days can only be fully exhausted if the restructuring attempt appears promising and feasible. The 60- day period can also be used for the preparation of judicial restructuring proceedings, with or without debtor in possession. The problem is that few entrepreneurs are willing to admit that a reason to file for insolvency proceedings exists. Most insolvency applications are made after the end of the 60-day time period.
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