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01 February 2024

Share purchase rights in Austrian insolvency proceedings

Shareholders of Austrian limited liability companies ("GmbH") often stipulate the right to purchase the shares of co-shareholders in certain events. These "share purchase rights" (Aufgriffsrechte) entitle the remaining shareholders to acquire the share of a shareholder when a contractually defined event (Aufgriffsfälle), like insolvency or the death of a shareholder, occurs. Often these rights are laid down in articles of association or a separate shareholders' agreement (Syndikatsvertrag). They are generally qualified as option rights.

The reasons for agreeing on such share purchase rights are manifold. The main one, however, is that a shareholder can no longer exercise their shareholder rights (e.g. due to insolvency). The remaining shareholders will thus want to protect themselves against unwanted new shareholders (for example the heirs or a person purchasing the share from the insolvency estate).


The admissibility of share purchase rights in the event of insolvency has long been disputed in Austrian legal doctrine. In some cases, it was argued that such share purchase rights are inadmissible when a discount on the share price is foreseen, unless the discount is also applied to all other cases of a shareholder leaving the company. In assessing the admissibility of share purchase rights, it is relevant whether they fall within the scope of Sections 21 to 26 of the Austrian Insolvency Act; Insolvenzordnung; "IO"). These insolvency law provisions give the insolvency administrator the privilege of withdrawing from or cancelling contracts more easily. If they were to apply to share purchase rights, the insolvency administrator would not be bound by them. The remaining shareholders would thus be unable to purchase the shares of the insolvent co-shareholder without the insolvency administrator's consent.

In August 2019, a Higher Regional Court (OLG Linz 6 R 95/19m) held that contractual share purchase rights are in any case inadmissible if a shareholder is insolvent and the insolvency administrator is not bound by them. In a more recent decision, however, the Austrian Supreme Court ("OGH") (6 Ob 64/20k) clarified that share purchase rights, which are triggered by a shareholder's insolvency, are in principle permissible. This is so even if the share price is below market value, but only if all cases of a shareholder leaving the company are treated equally. Specifically, the Supreme Court stated that such a share purchase right in the event of insolvency cannot be assessed in isolation but has to be seen in the overall economic context. A share in a GmbH is a sum of the shareholder's rights and obligations. Therefore, to put it crudely, a share purchase right in the articles of association is a "corporate law right", which does not fall under insolvency law provisions (especially Sections 21 to 26 IO). These provisions are only applicable to bilateral, synallagmatic contracts, like conventional purchase agreements.

New Supreme Court decision on option rights in insolvency proceedings

In its most recent decision on option rights in general (OGH 17 Ob 14/22s), the Austrian Supreme Court held that options remain unaffected by the opening of insolvency proceedings if the payment for the option has already been made. Thus, the insolvency administrator cannot withdraw from the option right contract according to Section 21 IO. However, the "main contract" (e.g. a purchase contract) that comes into force when the option right is exercised, is not insolvency-proof. The insolvency administrator may withdraw from the contract (pursuant to Section 21 IO analogously) if that contract (e.g. the purchase contract) has not been fulfilled by both parties. In the decision OGH 17 Ob 14/22s, a purchase contract for a real estate property had to be transferred by the debtor and the purchase price had to be paid by the option beneficiary.

This decision will most likely not affect share purchase rights, because they are "corporate law rights" that do not fall under Section 21 IO. Even if it were argued that Section 21 IO would apply in principle to a share purchase agreement ("SPA") that comes into force by the remaining shareholders exercising their option rights, the SPA can be fulfilled "automatically" when and if no further legal actions are necessary for the share to be transferred. This can be foreseen contractually. In that case, the conditions of Section 21 IO would not be fulfilled, and the administrator cannot withdraw from the SPA pursuant to Section 21 IO. However, this question has not yet been settled by Austrian courts or legal scholarship.


When structured correctly, share purchase rights can in principle be exercised in insolvency proceedings. This should equally apply to share purchase rights contained in the articles of association or in a shareholders' agreement.

authors: Felix Loewit, Miriam Simsa



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