Supreme Court Finds Insolvency Related Avoidance Claims Assignable

The Austrian Supreme Court has recently found that insolvency related avoidance claims can be sold. This may open a whole new business segment and will most certainly have a material impact on defendants in avoidance proceedings.

Assignability of insolvency related avoidance claims

In the case at hand (OGH 17 Ob 6/19k) an Austrian limited liability company concluded a purchase agreement on the sale of three properties (the "Purchase Agreement") to the wife of the company's de facto managing director in July 2015. Just over a year later, in October 2016, insolvency proceedings were initiated over the company's assets.

The insolvency administrator sold and assigned all claims under or in connection with the Purchase Agreement to an unrelated third-party buyer, with the purchase price amounting to EUR 5,000. In October 2017, the buyer challenged the Purchase Agreement under the Austrian Insolvency Act (Section 28 (3); intention to discriminate) and claimed EUR