Crime Scene: Corporate Bankruptcy – The Dangers of “Krida” under § 156 and § 159 StGB

When a company faces financial distress, the line between a hard-fought restructuring and criminal conduct is often thin. In Austrian criminal law, so-called “Krida” (insolvency-related) offenses play a central role. But what exactly is “Fraudulent Krida,” and when does economic misfortune turn into “Grossly Negligent Infringement of Creditor Interests”?

A closer look at Sections 156 and 159 of the Austrian Criminal Code (StGB) reveals that the legislator takes the protection of creditors very seriously.

The “Heavyweight”: Fraudulent Krida (§ 156 StGB)

Fraudulent Krida is a cornerstone of white-collar criminal law. Its purpose is to secure the debtor’s assets as a satisfaction fund for creditors.

The Offense (Actus Reus)

Criminal liability applies to anyone who:

• Conceals or hides assets (e.g., from an insolvency administrator).
• Secretes or removes assets (e.g., stashing cash).
• Disposes of assets without receiving equivalent consideration (e.g., selling assets to oneself or an associate significantly below market value).
• Pretends or acknowledges non-existent debts (e.g., accepting fake invoices to “drain” remaining assets).
• Damages assets

Der entscheidende Punkt: Der Vermögensbegriff

An economic concept of assets applies here. All assets that could serve creditors through compulsory enforcement are relevant. The offense is committed as soon as the satisfaction of even a single creditor is thwarted or diminished by an action.

Important: A conviction for Fraudulent Krida does not require the company to be officially insolvent (unable to pay or over-indebted). The maturity of the claims is also irrelevant. However, these factors are usually highly relevant when assessing the subjective side of the crime.

Subjective Intent

The presence of conditional intent (dolus eventualis) is sufficient. This means the perpetrator considers it seriously possible that their actions will thwart a creditor’s satisfaction and accepts this outcome.

Penalties

Fraudulent Krida is a felony (Verbrechen) carrying a prison sentence of six months to five years.

If the damage caused exceeds €300,000, the penalty increases to one to ten years of imprisonment.

Civil and Insolvency Law Consequences

Furthermore, a conviction carries massive consequences:

• A reorganization plan may be ruled inadmissible (§ 141 IO).
• Debt waivers already granted in a reorganization plan can be retroactively revoked if the conviction becomes final within two years of the plan’s confirmation (§ 158 IO).
• Disqualification as a director: A conviction for Fraudulent Krida resulting in a prison sentence of more than 6 months leads to an automatic three-year disqualification from serving as a managing director or board member.

When Carelessness Becomes a Crime: § 159 StGB

Not every insolvency offense happens with malicious intent. This is where Section 159 StGB applies, penalizing the grossly negligent infringement of creditor interests.

While § 156 requires intent, § 159 only requires gross negligence. The law distinguishes between three scenarios:

1. Causing insolvency through “reckless business conduct” (kridaträchtig).
2. Grossly negligent damage to creditors while knowing (or being expected to know) of existing insolvency.
3. Prevented Insolvency: Severely worsening the economic situation through reckless conduct such that insolvency would have occurred if not for (voluntary) state aid or “bailouts.”

Was gilt als „kridaträchtig“?

The law lists behaviors that contradict sound business management:

• Squandering assets or excessive spending disproportionate to financial standing.
• Hazardous transactions outside the normal scope of business (e.g., risky speculations or betting).
• Deficient Bookkeeping: Failing to keep records or preparing annual financial statements so late that a timely overview of the financial situation is significantly hampered.

Penalties

The maximum sentence for § 159 StGB is one year of imprisonment.

Conclusion: Caution in Times of Crisis

“Krida” offenses clearly show that managing directors and entrepreneurs bear an enormous responsibility toward their creditors. Those who try to “save” their company or assets in a risky manner during turbulent times or neglect their bookkeeping risk not only economic ruin but also severe criminal consequences.

Are you facing criminal proceedings for Fraudulent Krida or have you become a victim of it?

As an experienced white-collar defense attorney, Mag. Markus Weisser reviews your individual situation discreetly and competently. Arrange a confidential initial consultation today.