By an ordinance (Mandatsbescheid) issued on March
1, 2015, the Austrian Financial Market Authority ("FMA")
has initiated the resolution of HETA ASSET RESOLUTION AG
("HETA"). HETA is the "bad bank" that was
established to assume and manage large parts of the Austrian Bank
Hypo-Alpe-Adria, which was required to be resolved in accordance
with EU regulations. HETA is 100 percent owned by the Republic of
Austria, and it currently manages assets worth approximately EUR 18
billion. The FMA is acting in its capacity as resolution authority
pursuant to the Austrian Banking Restructuring and Resolution Act
The resolution measures have been structured in accordance with
the "Bank Recovery and Resolution Directive –
BRRD," the new European resolution regime for banks. The FMA
imposed a debt moratorium until May 31, 2016 in order to establish
a resolution schedule that corresponds to the targets of the BRRD.
The decision will change the maturities of all (subordinated and
non-subordinated) debt instruments and other liabilities issued by
HETA until May 31, 2016, with the exception of certain specifically
The resolution measure also covers bonds and other claims that
were restructured by the "Federal Act on Resolution Measures
for HYPO-ALPE-ADRIA-BANK INTERNATIONAL AG"
("HaaSanG"). The ordinance postpones the scheduled
maturity of HETA's eligible liabilities (capital and interest)
until May 31, 2016. Remedies are required to be filed with the FMA
within three months after publication of the ordinance
(specifically, by June 1, 2015); this does not entail a suspensive
effect. Additional measures are expected, particularly the
application of the bail-in by creditors. The FMA also has
indicated its openness to solutions by means of negotiation with
Various questions have arisen for non-Austrian investors:
What receivables are covered by the debt moratorium?
What receivables are affected by the "haircut," the
legally imposed extinguishment of certain subordinate liabilities
of HETA on the basis of HaaSanG or HaaSanV?
To what extent do HaaSanG and the FMA decision apply
extraterritorially, that is, are the measures applicable to
receivables under non-Austrian law?
To what extent does BaSAG apply to HETA since BaSAG constitutes
the framework for the resolution regime for banks but HETA is not a
What remedies are available either under Austrian law or,
possibly, under non-Austrian law—German, French and English
laws are applicable to a number of bonds, and in some cases, a
non-Austrian jurisdiction was agreed to?
Would non-Austrian courts recognize the ordinance, and the
moratorium stipulated thereunder?
Could investors enforce their rights in Austria or against
Austrian assets abroad?
Mayer Brown advises on these topics in close cooperation with
experts in Austria.
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A trustee in bankruptcy's rights to obtain a possession order and order for sale against a bankrupt's property will not be suspended indefinitely even where there are exceptional circumstances.
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