Vorarlberg records Austria’s sharpest rise in company insolvencies

Vorarlberg has recorded 150 company insolvencies this year, 40 percent more than in the previous year, according to figures cited by ORF. The increase is the highest among Austria’s federal states, the Credit Protection Association of 1870 said.

Nathaniel Heinritz, head of the association’s Vorarlberg office, attributed the rise to a catch-up effect and problems affecting the state’s economy. Vorarlberg was the only federal state to record a decline in insolvencies last year.

Construction and industry under pressure

Vorarlberg still has the country’s second-lowest insolvency rate per capita, after Tyrol. However, the increase is affecting more than just the construction sector, Heinritz said.

Construction has been weak for most of the year and remains one of the worst-hit sectors. Insolvencies are also rising in manufacturing. Construction, retail and hospitality account for the highest number of cases.

Industry has the highest level of liabilities, at 59 million euros. Of the 168 million euros in total debt, almost one-third is linked to two cases involving textile manufacturer feinjersey in Götzis and bicycle maker Simplon in Hard.

In Simplon’s case, 28 million of its 33 million euros in debt relates to liabilities that resurfaced after its failed restructuring plan in 2024. Feinjersey had also previously been released from debt.

More companies seek restructuring

The number of companies seeking restructuring has also increased. Only two restructuring proceedings were recorded during the whole of last year, while 16 proceedings have already been opened this year.

Heinritz said the cases involved companies that still had substance and a chance to reduce their debt and continue operating.

Three-quarters of the restructuring proceedings are being conducted without self-administration, giving an insolvency administrator greater control over the insolvent company.

Insolvency administrator Tobias Giesinger said many business owners found it difficult to seek help, often waiting until it was too late. He attributed this to the shame of failure, particularly among family businesses in their second, third or fourth generation, as well as the hope that the business could continue. Delaying proceedings can remove the opportunity for owners to restructure the company themselves, he said.

Private insolvencies in Vorarlberg also rose, by 8.4 percent. Heinritz said some people had brought forward their applications because the debt-discharge period was extended again from three to five years.