Abuse of Principles of Creditor Autonomy in Insolvency Proceedings

Andreas Frössel, Tomáš Troup

Publication: Scientific journalJournal articlepeer-review


This article comparatively examines the application of the concept of abuse
of law to the context of insolvency law, concretely regarding abuses of creditor rights in the insolvency proceedings. Two main areas of application can be identified in this regard, namely abuses of the principle of majority on the one hand, and abuses of the principle of preference on the other hand. After a short discussion of these principles, the authors first discuss how abusive conduct of the creditors may be theoretically demarcated and practically determined. They come to the conclusion that abuses of these principles will, in practice, only be picked up by the insolvency court in the most evident cases. Subsequently, several legislative measures against abusive conduct of the creditors are being discussed. In the following, the authors show how two legal orders, namely the Czech and the Austrian legal order, have tackled abusive conduct of creditors in the course of their legal historic development. It is shown that the implementation of a too extensive creditor autonomy has led to highly undesirable consequences in practice. While this caused a substantial removal of creditor autonomy in Austria by the legislator, substantive creditor rights are present in the current
Czech insolvency regime. Based on a tabular comparison of the two legal orders, the authors discuss the practical consequences of the current insolvency regimes. They conclude that the Austrian legal order is able to largely prevent abusive creditor conduct by restricting creditor autonomy, whilst the opposite applies to the Czech case. The Austrian and Czech experiences show that an unrestricted creditor autonomy has considerable negative consequences on the functioning of insolvency proceedings as a whole.
Original languageEnglish
Pages (from-to)727 - 764
JournalEuropean Review of Private Law
Issue number4
Publication statusPublished - 2017

Austrian Classification of Fields of Science and Technology (ÖFOS)

  • 505013 Private law
  • 505032 Civil procedure law
  • 505031 Civil law
  • 505

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