Section 87 IO: review removal of an insolvency administrator for a conflict of interest, including the application, important reason and hearing.
BRANDAUER Rechtsanwälte
Insolvency law, Salzburg and throughout Austria
We review the procedural status, contracts, payment records and security, then explain which legal question needs to be addressed next.
A conflict of interest can constitute an important reason for removing an insolvency administrator. The insolvency court may act on its own initiative or on a reasoned application. The relevant material consists of concrete facts about the relationship, the act concerned and the possible effect on the administrator's independent work.
Under section 87(2) IO, the debtor and every member of the creditors' committee may apply at any time. A creditors' meeting convened to deal with this subject may also apply for removal. The application must state its reasons.
Before deciding, the court hears the members of the creditors' committee and, where practicable, the insolvency administrator. This article structures an application under section 87 IO. General supervision of individual measures and possible liability address separate questions.
Place your procedural status, the facts and the court's response in a sequence that can be followed from the file.
| Review field | Documents | Key question | Next step |
|---|---|---|---|
| Procedural status | Opening order, appointment order and committee documents | Who may apply under section 87(2) IO? | Prove the right to apply |
| Possible conflict | Contracts, messages, orders and timeline | Which concrete relationship or act establishes the conflict? | Arrange the facts chronologically |
| Reasons | Application, attachments and identified evidence | How could the conflict affect independent performance of the office? | Connect the request and evidence |
| Hearing | Statements from the creditors' committee and administrator | Whose views must the court hear before deciding? | Document the procedural status |
Section 87 IO governs removal for important reasons. The insolvency court decides the concrete case.
This short check structures status, conflict facts and the hearing under section 87 IO. It does not replace a review of the complete insolvency file.
Discuss the specific matter with the firm.
Set out the concrete conflict of interest, the act concerned, the timeline and the evidence in a reasoned application. Add the current status of the insolvency proceeding so the court can classify the statements under section 87(3) IO.
Describe the relationship, personal interests, concrete acts and their timing. A general concern does not yet explain the important reason sufficiently. Link each material point to the relevant evidence.
Separate the alleged conflict from the requested court action. Check whether the application seeks removal under section 87 IO and what information is available for hearing the creditors' committee and the insolvency administrator.
Section 87(2) IO names the debtor, every member of the creditors' committee and a creditors' meeting convened to deal with this subject. An ordinary insolvency creditor should therefore clarify committee membership or whether the matter can be dealt with at a creditors' meeting convened for it.
Put the opening order, appointment order and creditors' committee documents together. Only then can you classify whether the application follows from your own status or from a creditors' meeting convened for the subject.
Section 87(1) IO links removal to an important reason. A conflict of interest can fall within that standard where concrete circumstances affect the administrator's independent performance of the office. The provision does not provide a conclusive list of individual conflicts. The application must therefore connect the administrator's relationship or personal interest with a concrete act in the proceeding.
A suspicion without a link to the file will generally not provide enough structure for the review. Describe who is connected to whom, which decision or measure is concerned, when it occurred and how the office may be affected. The insolvency court remains responsible for the legal assessment.
Under section 87(2) IO, the debtor may apply for removal at any time. The same applies to every member of the creditors' committee. The first and every later creditors' meeting convened to deal with the removal may also apply. The application must give reasons.
Your procedural status therefore belongs at the start of the review. Section 87(2) IO does not name an ordinary insolvency creditor as a direct applicant solely because of that creditor status. The creditor should clarify whether committee membership exists or whether the issue can be dealt with at a creditors' meeting convened for this purpose.
A comprehensible statement of reasons separates facts from legal assessment. The file should contain the appointment of the administrator, your procedural status, the alleged relationship or personal interest, the act concerned, the timeline and the related documents. Messages, contracts, orders and other documents should each be assigned to a specific statement.
The request should expressly seek removal of the insolvency administrator for the alleged important reason. A list of dissatisfaction, delays or financial disadvantages does not make that connection by itself. If the person also seeks review of individual measures or compensation for loss, those matters should be identified as separate issues.
Before deciding, the court hears the members of the creditors' committee under section 87(3) IO. Where practicable, it also hears the insolvency administrator. The rule ensures that the decision is based on the current status of the proceeding and the relevant views.
For preparation, submit the application and attachments completely and record which facts are disputed. Statements by the creditors' committee or the administrator answer the court's need for information, but they do not replace the review of the important reason. Section 87 IO does not prescribe one hearing format for every case.
An application under section 87 IO seeks removal of the insolvency administrator for an important reason. Court supervision of individual measures and possible personal liability answer different questions. Keep the reasons for the removal application separate from a complete calculation of loss or a general criticism of the conduct of the proceeding.
For organising the file, the existing article on supervision of an insolvency administrator addresses directions and complaints. The article on administrator liability follows the review of breach of duty and loss. The first review of an insolvency administrator helps structure the file.
A conflict of interest can constitute an important reason under section 87(1) IO. The application must explain the concrete circumstances, the act concerned and the possible effect on independent performance. Removal does not follow automatically.
Section 87(2) IO allows the debtor and every member of the creditors' committee to apply at any time. A creditors' meeting convened to deal with this subject may also apply. The application must state its reasons.
Section 87(2) IO does not list an ordinary insolvency creditor as a direct applicant solely because of creditor status. Committee membership or consideration of the issue at a creditors' meeting convened for it must be reviewed.
Before deciding, the court hears the members of the creditors' committee and, where practicable, the insolvency administrator under section 87(3) IO. The concrete form and course depend on the procedural situation.
Useful documents include the appointment order, proof of procedural status, material on the relationship or personal interest, the concrete act, a timeline and the related evidence. The request for removal should be stated clearly.
Organise documents, information and the next file review.
Distinguish supervision and complaints about individual measures.
Classify appointment, duties and personal procedural status.
Review calculation, evidence and court control separately.
Organise remuneration, cash expenses and the final account together.
Distinguish the declaration, benefit of inventory and estate documents.
Classify the role and duties in insolvency proceedings.
Submit the application, evidence and procedural status in order.
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