News The economic downturn caused corporate bankruptcies to rise

The economic downturn caused corporate bankruptcies to rise

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The cooling economy, trade conflicts and Brexit uncertainties led to an increase in bankruptcies in 2019. However, since small businesses were increasingly affected, both total liabilities and the number of jobs affected were reduced by a quarter each. Most of the jobs were lost in the bankruptcy of the fashion chain Charles Vögele and the construction company Herbitschek.

The largest insolvency of 2019 cannot yet be determined with certainty, according to the Alpine Credit Association (AKV) in its insolvency statistics on Monday. The expected relaxation did not occur in the private bankruptcy sector. After the “record bankruptcy year” 2018 with more than 10,000 private bankruptcies opened, the number fell to 9,500 in the previous year.

After liabilities, Montesino insolvency, a company of the Zanoni group, is the largest bankruptcy with 154 million euros. These are mainly tax liabilities that were initially disputed.

There was also a peculiarity in the insolvency of the tour operator Thomas Cook. When the procedure was opened, liabilities were valued at EUR 33 million. Up to the general examination statute, however, only claims in the amount of EUR 10.3 million were registered.

“It is still open to what extent liabilities for group companies become effective,” says AKV. The English civil aviation authority has filed a claim for damages in the amount of EUR 605 million, which is currently being examined by the insolvency administrator.

Overall, corporate insolvencies rose by around three percent to 5,292 in the previous year. Total liabilities decreased by almost 25 percent to EUR 2.18 billion, and the number of directly threatened jobs also fell by a quarter to 12,773 people. At Vögele alone, 394 employees lost their jobs. Shortly before Christmas, individual catch-up solutions were implemented at Herbitschek, so that 200 of the 298 jobs are to be retained.

At Gruber & Kaja High Tech Metals GmbH, a company of the HTI group, 210 employees were affected, at Hans Andersen it was 190 people, at the Jones 177 fashion label, whereby the company completed a restructuring plan in December and is slimmed down.

Most of the bankruptcies were in the construction industry (629 cases) and in trade (626). While in Vienna with 1,050 insolvency proceedings, as many proceedings opened as in 2018, there were strong increases in Burgenland (+ 33 percent), Vorarlberg (+ 28 percent) and Tyrol (+ 25 percent). In Lower Austria (- 6 percent) and Styria (- 5 percent), however, the number of bankruptcies opened decreased compared to 2018 as a whole.

Source: APA

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