High Bankruptcy Numbers Expected in 2024

High Bankruptcy Numbers Expected in 2024

Signa’s unfinished Lamarr-Kaufhaus department store in Vienna’s Mariahilferstrasee, APA/Georg Hochmuth

 

Austria is on course for a record number of bankruptcies this year, following 2,098 business bankruptcies declared in the first six months, as reported by the credit protection association Alpenländische Kreditorenverband (AKV Europa) in a press release on Monday.

This represents an increase of 35.8% compared to the same period last year and is the highest figure in 15 years. Of the 2,098 cases cited by the AKV, 1,577 business bankruptcies were finalised.

The AKV forecasts a total of 7,000 business bankruptcies for 2024.

The number of rejected business bankruptcy cases, where bankruptcy was not accepted by financial authorities, also increased by 16.74%, totalling 1,311. The AKV finds this trend concerning: “This development continues to show that many companies, kept afloat by state support measures, do not even have free assets of €4,000 to cover the costs of a formal insolvency procedure.”

The reasons for the high number of business bankruptcies include consumer and investment reluctance. High interest rates and low credit demand have also contributed. As a result, the retail sector was hit hardest with 529 insolvencies, followed by the construction sector with 493 and the hospitality sector with 356.

The outlook is more favourable for personal bankruptcies: 4,600 proceedings were declared, an increase of only 1.25% compared to the same period last year.

Last year, the property giant Signa, owned by Austrian billionaire René Benko, declared insolvency in one of the largest bankruptcies in Austrian financial history.

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