Creditors of an insolvent entity file their claims against the
entity with the insolvency administrator (Germany) or insolvency
court (Austria). If a claim is accepted, it is registered in the
insolvency table as an accepted claim and the creditor is listed as
an insolvency creditor in the insolvency proceedings.
Funds can acquire these registered claims from creditors. In
Austria, it is advisable to gain the express consent of the
insolvency administrator for such a purchase. After such an
acquisition, the purchaser is registered as a new insolvency
creditor in the insolvency table.
Over the last twelve months, we have seen an increasing number
of funds – in particular, US funds – buying larger
stakes of insolvency claims in Germany and Austria.
Whilst in Germany, funds focus on acquiring single claims
exceeding EUR 10 million, investors are willing to
opt for smaller claims in Austria.
Average German insolvency proceedings
In 2015, there were 23, 230 entity insolvencies in Germany. Of
these, 160 insolvencies were commenced over the estate of entities
with revenues above EUR 25 million p.a.
The average recovery percentage in Germany ranges between 3% and
5% of the claims filed.
However, in the aforementioned 160 insolvencies of more
substantial entities, the recovery was significantly higher;
exceeding 50% and more of the claims' amount filed.
Recovery of insolvency claims takes between one and four
Average Austrian insolvency proceedings
Austria saw 5,150 entity insolvencies in 2015 (including cases
where proceedings were rejected by the court) of which 174
insolvencies were commenced over the estate of entities with a
revenue of between EUR 2 million – 10
million p.a. and 35, to entities with a revenue of more than
EUR 10 million p.a.
The average recovery in Austria is around 10% of the claims
filed; the average recovery period for insolvency claims takes 2
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