Liabilities increased ninefold

Austria faces a record bankruptcy year in 2024

As the forecasts of the Economic Forum (Wifo) and the Institute for Advanced Studies (IHS) only predicted GDP growth of 0.2 percent this year, the AKV expects 7,000 insolvencies this year.

(Bild: stock.adobe.com/totalpics, stock.adobe.com)

In the first six months of the year, 2098 corporate insolvencies were opened, representing an increase of 35.8 percent compared to the previous year and the highest figure in 15 years. 

This was announced by the Alpine Creditors' Association (AKV Europa) in a press release on Monday. Liabilities (the amount of capital made available to a company, note) have even increased ninefold to EUR 11.5 billion compared to the same period last year. 2023 was already marked by major bankruptcies in the retail and real estate sectors. The AKV forecasts around 7,000 insolvencies for 2024.

In the first half of the year, the majority of liabilities were attributable to insolvencies relating to Signa founder René Benko, his private foundation and Signa companies. However, only a fraction of the claims have been recognized to date.

The bankruptcy of the Austrian subsidiary of the US electric car manufacturer Fisker contributed around EUR 1.5 billion to the liabilities. However, even in the restructuring proceedings with self-administration, the recognized liabilities have not yet been determined.

Number of jobs at risk remains constant
Although the number of insolvencies has risen massively, the number of jobs at risk has remained constant at 9411 employees. According to the AKV, it is positive that the proportion of own applications has increased again.

The reasons for the high number of company bankruptcies:

• A reluctance to consume and invest caused problems for many companies.
• High interest rates and a lack of demand for credit had a negative impact on new construction.
• The retail sector was affected by the current economic situation with 529 insolvencies, followed by construction (493) and gastronomy with 356 registrations.

However, 1577 company insolvencies were terminated in the first half of the year. A restructuring plan was concluded in 28.79 percent of cases, and a payment plan was agreed in 6.53 percent. Debt relief proposals were accepted in around a third of the proceedings. And 27.46 percent of insolvencies ended in total default for the creditors.

Private insolvencies: 4600 proceedings
The situation with private insolvencies is more encouraging: 4600 proceedings were opened, 1.25 percent more than in the same period last year. However, the number of rejected applications fell by 0.91 percent to 434 cases. This means that there was only an increase of around one percent in the first half of the year with 5034 proceedings.