Banks Establish Principles For Restructurings In Austria

Newly established principles provide guidance for the cooperation between all involved banks in extra-judicial restructurings.

1. The context

In times of financial turbulences such as those witnessed over the past few years, taking a sound and comprehensive approach to addressing a company's crisis appears vital to preserving the company's existence, safeguarding jobs, and circumventing negative consequences for the affected business location. In this context, extra-judicial restructurings, which take place before and aim to avoid the opening of insolvency proceedings, have gained enormous momentum.

As the major creditors, banks play a crucial role in all restructuring proceedings. The extra-judicial restructurings of the past few years have shown that reliable cooperation amongst creditors when they are working with financially troubled companies is crucial in minimizing damages for all participants. A successful reorganization not only protects banks and other