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Debtor in Possession

Debtor in Possession. Franz Mohr Austria. Insolvency proceedings. bankruptcy-proceedings for entreprenneurs (Konkurs) composition-proceedings (Ausgleichsverfahren) bankruptcy-proceedings for consumers - debt settlement proceedings (Schuldenregulierungsverfahren).

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Debtor in Possession

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  1. Debtor in Possession Franz Mohr Austria

  2. Insolvency proceedings • bankruptcy-proceedings for entreprenneurs (Konkurs) • composition-proceedings (Ausgleichsverfahren) • bankruptcy-proceedings for consumers - debt settlement proceedings (Schuldenregulierungsverfahren)

  3. Debtor in possessionSection 186 • (1) In debt settlement proceedings (Schuldenregulierungsverfahren) the debtor remains in possession of the bankrupt’s estate unless the court orders otherwise (debtor in possession). • (2) The court shall revoke the right to be debtor in possession and appoint a bankruptcy administrator, should • 1. the debtor’s financial situation not be straightforward, especially with regard to the number of creditors and the amount of debts, or • 2. circumstances be known which would make it likely, that leaving the debtor in possession would be detrimental to the creditors, or • 3. the debtor not have presented an exact disclosure of assets (Vermögensverzeichnis).

  4. composition-proceedings Section 2 • The application for the opening of a composition proceeding must contain the following elements • A reorganisation plan • A declaration that there is no reason that would make the composition proceeding unlawful

  5. composition-proceedings Section 2 • Information on how the reorganisation shall be achieved and, in particular, how the funds necessary to pay the quotas offered to the creditors shall be raised • An exact inventory • A status of assets and liabilities • A list of creditors

  6. composition-proceedings Section 3 • In particular, for the duration of the proceedings the court may forbid specific legal acts, in general or without the trustee’s consent if • the debtor not have presented an exact disclosure of assets (Vermögensverzeichnis) or • circumstances be known which would make it likely, that leaving the debtor in possession would be detrimental to the creditors

  7. Debtor in possession • Debt settlement proceedings • An admistrator isn’t appointed • Composition proceedings • The debtor is supervised by an administrator

  8. Reform • debt settlement proceedings • Insolvency proceedings entreprenneurs • Liquidation proceedings (if the business is closed) • Bankruptcy proceedings (this proceedings start with an investigation period to find out if the business can be rescued or has to be sold) (Konkurs) • Reorganisation proceedings (Sanierungsverfahren) • Reorganisation proceedings, debtor in possession (Sanierungsverfahren) in place of composition-proceedings (Ausgleichsverfahren)

  9. Reorganisation proceedings • Debtor in possession • Supervised by an administrator • Advantage • Encourage the debtor to file for the proceeding • Disadvantage • When it is advisable to revoke the right to be debtor in possession?

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