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Legal measures to mitigate the financial impact of the Coronavirus crisis on companies (as per 15 October 2020)
The Austrian legislator has once again reacted to the COVID-19 pandemic crisis by extending some existing legislative measures. On 23 September 2020, the National Council adopted an amendment to the 2. COVID-19-Justiz-Begleitgesetzes (2nd COVID-19 Accompanying Act on Justice), which was published in the Federal Gazette No BGBl I 113/2020 and will be effective from 15 October 2020. See our update of 10 April 2020 on the original measures.
Please find below an overview of the latest amendments made to the relevant measures:
Current Loans of Micro-Enterprises and Consumers
The period for deferral of payments under credit agreements has been extended. It now covers loans to consumers and micro-enterprises that are due by 31 January 2021 (previously 31 October 2020), with the deferral period being extended to ten (previously seven) months. Termination by the lender due to late payment or significant deterioration of the borrower's financial situation is excluded until the deferral period expires. If, in the case of loan agreements, no mutual agreement can be reached for the period after 31 January 2021 (previously 31 October 2020), the term of the agreement shall be extended by ten (previously seven) months. The respective due date of the contractual obligations will be postponed by this period.
The suspension of the obligation to file for insolvency in case of over-indebtedness was extended until 31 January 2021 (previously 31 October 2020). This also includes the filing of an application by a creditor if the reason for the application concerns the over-indebtedness of a debtor. If a debtor is over-indebted at the end of 31 January 2020, he must apply for the opening of insolvency proceedings without undue delay, but at the latest within 60 days after the end of 31 January 2021 (previously 31 October 2020) or 120 days after the occurrence of over-indebtedness, whichever period ends later. During this period, members of the management board of stock corporations are not personally liable in respect of payments that are made after the company has become over-indebted.
Equity Substitution Laws
The exemption according to which the (unsecured) granting of a loan to a company by its shareholder for no more than 120 days does not constitute a loan within the meaning of sec 1 of the Austrian Equity Substitution Act (EKEG) (i.e., an equity substitution) was extended until 31 January 2021 (previously 31 October 2020).. This provision is intended to temporarily facilitate a quick and unbureaucratic bridging of short-term liquidity bottlenecks by a shareholder loan. The provision is limited to unsecured shareholder loans in order not to shift too much of the risk that such restructuring fails to any potential insolvency creditors.
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