#70 How to exchange debt for equity?

Of around 3,000 insolvency proceedings in Austria every year, around a third end with a finalised restructuring plan. This number could be increased further - with the help of a debt/equity swap, which is used in the Anglo-American countries and in Germany, among others. Why not in Austria? Legal scholar Julian Schnur looks at the legal requirements for implementation in Austria. The procedure would be an alternative to the current restructuring process, particularly in the event of insolvency or over-indebtedness of large companies. Creditors would exchange their financial claims for shares in the company and become shareholders. This would give them the advantage of receiving higher compensation for their claims than before. The catch: a greater risk, should bankruptcy become imminent again.