BEIRA Corona Task Force Update

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Overview of legal measures to mitigate the financial impact of the Coronavirus crisis on companies (as per 20 March 2020)

The Austrian legislator has extended the measures adopted so far and has introduced new measures to mitigate the financial effects of the crisis in connection with "SARS CoV 2" or "COVID-19" ("Coronavirus") for companies. Existing measures, which can be reviewed in our overview of 17 March 2020, remain in place. The following is an overview of the new measures:
 

RELIEF EFFORTS FOR AFFECTED COMPANIES

Crisis Management Fund

According to the Austrian legislator, the implementation of the financial support under the "COVID 19 Crisis Management Fund" pursuant to the COVID-19 Fund Act is to be carried out via the Federal Government's "Abbaubeteiligungsaktiengesellschaft" ("ABBAG").

The regulation of the Federal Minister of Finance on the guidelines for the granting of financial aid from the COVID-19 Crisis Management Fund has already been issued and regulates the utilisation procedure and the conditions for utilisation applicable to the individual ministries that want to take certain measures to manage the Coronavirus crisis. One such measure that has already been taken is the Hardship Fund endowed with one billion euros from the COVID-19 Crisis Management Fund (see below).

Export Guarantees

The Austrian federal government provides an export credit facility of two billion euros via "Österreichische Kontrollbank" ("OeKB") to support the liquidity of Austrian export companies. These funds are made available via a new refinancing framework (COVID-19-KRR). Export companies, together with their financing bank, can apply for a credit line of 10% (for large enterprises) or 15% (for small or medium-sized enterprises) of their export turnover at OeKB. The maximum amount is 60 million euros per customer; the financing is initially limited to two years (with the possibility of an extension). The costs are based on the existing refinancing framework, with a slightly increased fee on the guarantee in respect of the relevant promissory notes.

Assistance for Small or Medium-Sized Enterprises

In order to support small or medium-sized enterprises, the Austrian legislator, in the SME Assistance Act, has provided for an expansion of the guarantee frameworks of both the "Österreichischen Hotel- und Tourismusbank" (ÖHT) and the "Austria Wirtschaftsservice" (aws). Such expansion will be implemented by a regulation to be issued by the Federal Minister of Finance together with any any other minister competent in the respective matter.

Hardship Fund

The establishment of a hardship fund (endowed with one billion euros from the COVID-19 Crisis Management Fund; see above and our overview of 18 March 2020) is intended to mitigate hardship cases in SPs, freelancers, NPOs and micro-enterprises caused by legal and economic consequences of the Coronavirus crisis. The implementation of this subsidy programme will be based on a directive issued by the Minister of Finance in agreement with the competent ministers on the basis of the SME Assistance Act. The actual processing will be carried out by the Austrian Chamber of Commerce.

Artists' Social Security Fund

In order to mitigate the loss of income for artists due to the Coronavirus crisis, the Austrian legislator has resolved that the Artist's Social Security Fund may grant additional subsidies in the total amount of up to five million euros in the calendar year 2020. Separate directives will be issued for the granting of such subsidies, which may also provide for support for cultural agents.

Fees and Administrative Charges

As an additional financial relief, the Austrian legislator has exempted (retroactively as of 1 March 2020) writings and official acts that are or will be made directly or indirectly on the basis of the measures necessary in connection with the Coronavirus crisis from fees and federal administrative charges payable on them.
 

PROCEDURES AND DEADLINES

General Rules

Among other things, the Austrian legislator has resolved on the temporary suspension of court proceedings, the suspension of time limits, the restriction of court operations, the reduction of visiting rights in prisons, the use of video technology for interrogations and hearings, and the possibility of circular decisions/resolutions by the Constitutional High Court and the Administrative High Court.

Specifically, all time limits in court proceedings (civil proceedings, non-contentious proceedings, land register and commercial register matters as well as enforcement and insolvency proceedings) will in principle be suspended until 1 May 2020 and will start to run anew on 1 May 2020, whereby such suspension period may be extended by the Federal Minister of Justice if necessary. The only exception to the suspension of proceedings are proceedings concerning detention measures.

However, the competent court may shorten the duration of the suspension of proceedings for reasons of urgency (to avert a danger to life and limb, security or freedom or to avert substantial and irrecoverable damage to a party to the proceedings).

Oral hearings and personal interviews should, if possible, only be conducted for the above-mentioned reasons of urgency and, if so necessary to be conducted, they should be conducted by suitable technical means of communication (e.g. video conferences).

Largely similar rules have also been resolved for deadlines in proceedings under the Austrian Federal Fiscal Code and the Austrian Fiscal Penal Code.

In addition, deadlines under substantive law are also deemed suspended until 1 May 2020; i.e. the period from 23 March 2020 up to and including 30 April 2020 is not included when calculating the period in which an action or application is to be filed or a declaration is to be made.

During this period, a written reminder in respect of a liability that became due after 23 March 2020 will not lead to a default in insolvency restructuring proceedings.

For merger control notifications received by the Federal Competition Authority prior to 30 April 2020, the deadline for the examination request shall run from 1 May 2020, and for examination requests that are pending before the Austrian Cartel Court on 23 March 2020 or that are made by the end of 30 April 2020, the deadline for a decision shall run from 1 May 2020.

As long as the periods mentioned in this point are suspended, certain alleviations apply to notifications requiring proof of delivery.

Insolvency and Enforcement Proceedings

In the Austrian Insolvency Code as well as in the Austrian Enforcement Code, the Austrian legislator has included a clarification that epidemics and pandemics fall under the term "natural disaster". If a natural disaster is (partly) responsible for the insolvency of a company, the time period for the obligatory filing for insolvency is extended to 120 days. It should be noted that such extended period (same as the regular period) may only be utilised as long as there is the prospect of a successful restructuring.

If a person is affected by a natural disaster that puts him or her in economic difficulties and if this leads to the initiation of enforcement proceedings, the enforcement is to be delayed at the request of the obligated person without the provision of security if (i) such enforcement would otherwise destroy the economic existence of the obligated person and (ii) there is no risk of substantial damage to the creditor caused by such delay of enforcement.
 

SPECIAL MEASURES IN COMPANY LAW

In respect of company law, the legislator has taken two measures in the form of a separate act (COVID-19 Company Law Act, "COVID-19-GesG")

Meetings of Shareholders and Board Members

As long as the measures relating to the Coronavirus crisis persist, meetings of shareholders and members of the bodies of a corporation, partnership, cooperative, foundation or association, mutual insurance association or small insurance association may be held without the physical presence of the participants (whether or not such form of meeting is provided for in the company's documents). The Federal Minister of Justice will stipulate by regulation how these meetings are to be held, in particular to ensure a comparable quality of the decision-making process.

Annual General Meetings of Stock Corporations

In the calendar year of 2020, the annual general meeting of stock corporations must no longer be held within the first eight months of the financial year of the relevant stock corporation, but only within the first twelve months thereof.
 

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