On 26 June 2025, the Austrian Supreme Court (“OGH”) issued decision 17 Ob 2/25f, a ruling of considerable significance for Austrian insolvency law. At issue was whether an insolvency administrator has standing to assert so-called quota damages — the shortfall between the hypothetical satisfaction of creditors absent a delayed insolvency filing and the actual distribution achieved.

Facts and Prior Law

The insolvency administrator sought more than EUR 1.1 million in damages from the former managing director of an insolvent Limited liability company (GmbH), alleging culpable failure to file for insolvency in a timely fashion. The claim comprised:

(i)    an operating loss of EUR 470,731.86—a classic corporate injury; and

(ii)    an additional quota damage of EUR 687,842.27, allegedly suffered by pre-existing creditors.

The central question was whether the insolvency administrator was entitled to pur-sue quota damage claims during the pendency of insolvency proceedings.

The plaintiff invoked, among other things, sec 25 of the Austrian Limited Liability Companies Act (GmbHG) and the provision introduced by the Company and Insolvency Law Amendment Act 2003 (GIRÄG 2003) in sec 69 para 5 of the Austrian Insolvency Code (IO), according to which creditors may only assert claims for quo-ta losses after the insolvency proceedings have been discontinued.

Holding of the OGH

The Supreme Court held—consistent with its prior case law—that an insolvency administrator lacks standing to assert quota damage claims during ongoing insolvency proceedings. In so doing, the Court departed sharply from the prevailing scholarly view, making explicit that no such authority exists while proceedings remain pending.

The Court reasoned that the introduction of sec 69 para 5 IO by GIRÄG 2003 did not alter the legal landscape. Unlike the parallel provision of German law (sec 92 German Insolvency Code - InsO), the Austrian text contains no statutory foundation for administrator standing, nor do the legislative materials support the view that Parliament intended to confer such authority.

Accordingly, an insolvency administrator may pursue only those claims that belong to the insolvent company itself, in particular:

(i)    operating losses pursuant to sec 25 para 2 GmbHG and sec 84 para 2 Austrian Stock Corporation Act (AktG); and

(ii)    liability for payments after insolvency pursuant to sec 25 para 3 lit 2 GmbHG and sec 84 para 3 lit 6 AktG.

These so-called “internal claims” are offset by the “external claims” of the old creditors, which, in the opinion of the Supreme Court, cannot be asserted collectively by the insolvency administrator.

Within the scope of the claims for damages to be asserted by him, the insolvency administrator can effectively use his information advantage over the individual creditors and thus ultimately prevent or at least reduce the creditors' quota loss.

No implied authorization under sec 69 para 5 IO

It is particularly significant that the Supreme Court expressly rejects the widely held reverse conclusion drawn from sec 69 para 5 IO. Although this provision prohibits individual claims for quota losses during insolvency proceedings, this does not mean that the insolvency administrator takes the place of the creditors. Such active legal standing cannot be derived from the wording of the provision or from the legislative materials.

4Consequences for practice and doctrine

The decision of the Supreme Court provides legal clarity, but also has practical consequences:

(i)    The insolvency administrator cannot assert claims of creditors (e.g., quota losses) (during insolvency proceedings).

(ii)    The insolvency administrator is required to assert the claims of the com-pany, the operating loss, and liability for payments after insolvency in or-der to prevent or at least minimize any damage to creditors.

(iii)    Existing creditors can only pursue their quota losses individually after the insolvency proceedings have been legally terminated (sec 69 para 5 IO).

(iv)    The distinction between internal and external liability is strengthened.

Criticism and open questions

The decision contradicts much of the literature, which interpreted sec 69 para 5 IO as a de facto transfer of the right to assert claims to the insolvency administrator. However, the Supreme Court refers to the clear dogmatic distinction between internal and external liability, emphasizes the different legal bases, and rejects an analogy.

The decision also shows that procedural expediency cannot replace legal legitimacy.

The situation in which old creditors must, after the insolvency proceedings have been legally terminated, engage in litigation with the corresponding litigation risk for a potentially minimal increase in the distribution rate remains unchanged.

Conclusion

With 17 Ob 2/25f, the Supreme Court establishes clear dogmatic conditions and emphasizes the principle that only those who have actually suffered damage can sue — and at the right time. The insolvency administrator does not represent the interests of creditors with regard to quota damages but is the representative of the estate—and remains so.