Austria: Demergers – Creditors’ Right to Securing

Legal situation before the GesRÄG 2011

Before the amendment in 2011, creditors of the transferring company – if the satisfaction of their claims was at risk – could demand security of the involved companies by giving notice within six months after publication of the demerger’s registration in the commercial register. If no agreement between the creditors and the involved companies regarding the security, or no joint appointment of a security was achieved within nine months from publication of the demerger’s registration, all companies involved in the demerger were jointly and severally liable. This liability could be avoided only if a court stated that (i) the claim was not threatened by the demerger, so that no risk was given, or (ii) an appointed security was sufficient.²

New legal situation

Since the GesRÄG 2011 came into effect, Sec 15 of the Austrian Demerger Act (Spaltungsgesetz; SpaltG) provides for a creditors’ right to securing that is legally enforceable in contentious proceedings.

Entitled creditors/covered claims

Creditors of the transferring company whose claims were constituted before the demerger’s registration (Sec 15 para 1 SpaltG) and for which they cannot demand satisfaction are entitled to demand security under Sec 15 para 2 SpaltG. It is not relevant whether these claims are transferred to the receiving company together with the demerger capital or if they remain with the transferring company.

No security can be demanded for claims due. Also, the right to securing is not provided for claims in dispute. The existence of a creditor’s claim is thus a pre-condition to a proceeding.

Claim opponents

Creditors of the transferring company can enforce their claim against every company involved in the demerger. Securing is still a joint and several obligation and affects all parties involved in the demerger equally, regardless to which company involved the claim is assigned in the course of the demerger.

With respect to the amendment in 2011, it was expected that only the company to which the claim is assigned in the course of the demerger need provide security. The securing regime, however, was not amended this way. Therefore, all companies involved in the demerger must provide security. From the view of creditors’ protection, this is a highly positive development, as there is a substantial risk that the free assignability of assets and liabilities with the demerger will lead to an unbalanced capitalisation of the companies involved in the demerger. The creditor could then face only a financially weak principal debtor.

The SpaltG provides no recourse regulations for the companies involved in the demerger. So the demerger plan or the demerger and takeover agreement should deal with this aspect.

Requirements/contents of the right to securing

According to § 15 Abs 2 SpaltG, creditors may demand security only if the demerger puts the fulfilment of their claim at risk. The creditors must show a credible risk; a mere statement is no longer enough.

Regarding the amount of the right to securing, reference is made to the theory developed in Sec 226 Abs 1 of the Austrian Corporation Act (Aktiengesetz; AktG). Thus, the amount of the security to be appointed must comply with the “opinion of careful and diligent entrepreneurs considering the risks involved”.³

Legal enforcement/liability

The most significant amendment with regard to the previous legal situation is that the decision whether a security is appointed or if unlimited joint liability enters in force is not left to the discretion of the companies involved in the demerger. Now, if securing is legally enforced within six months after the publication of the demerger’s registration in the commercial register, all involved companies are liable for the claim unlimited as joint debtors from that moment on (temporary), until (i) the security is provided or (ii) the claim is finally dismissed. The legal enforcement and the point of time starting the six months period for the demanding of securing are now consistent with the situation for mergers under Sec 226 para 1 AktG.⁴

Compared with the previous legal situation (expiry of nine months period), the unlimited joint liability of the involved companies implies the initiation of a judicial proceeding. A mere “notification” of the involved companies or the expiration of the period does not trigger such a legal consequence any more.

Creditors of the transferring company can enforce their claim against every company involved in the demerger. Securing is still a joint and several obligation and affects all parties involved in the demerger equally, regardless to which company involved the claim is assigned in the course of the demerger.

¹Gesellschaftsrechts-Änderungsgesetz 2011 (GesRÄG 2011), BGBl I 2011⁄53.
²OLG Wien 4. 9. 2006, 28 R 76/06m.
³ErläutRV 1252 BlgNR 24. GP 19 with reference to Kalss, VSU2 Sec 226 AktG No 20.
⁴ErläutRV 1252 BlgNR 24. GP 19.

authors: Roman Perner, Stefanie Aichhorn-Wöss