As can be read in the media, reorganization proceedings were opened on the assets of the Kärntner Landes- und Hypothekenbank-Holding.
The reason for the application for initiation of reorganization proceedings is the liability by virtue of law of the applicant for all current and future liabilities of the bad bank HETA Asset Resolution AG, universal successor of Hypo Alpe-Adria-Bank International AG.
Due to the deficiency guarantee, claims in billions of dollars were brought against the applicant. The incurred costs alone threaten its entire existence. The purpose of this procedure is to determine the total liabilities and to lead negotiations with creditors. Therefore, the creditors have to announce their claims to the legal representative of the applicant.
Since the Austrian Company Reorganization Act came into force on in 1997 entrepreneurs have the possibility to apply for opening of reorganization proceedings if the company is not insolvent and requires the reorganization. A need for reorganization is presumed by law if the equity ratio is less than 8% and the fictitious debt repayment period is more than 15 years.
The opening of reorganization proceedings is not to be made public. However, since 1997 there has supposedly been only one such procedure.
It can be assumed that the reason that the procedure has not yet been accepted if that entrepreneurs often react too late to an emerging company crisis.
It is more than doubtful that the procedure will be accepted. The alternative is ultimately the insolvency of the applicant and as well as of the Austrian state Carinthia.