The Supreme Court’s decision of August 24, 2017 (4 Ob 110/17f) brings legal clarity for crowdfunding models that are based on subordinated loans.

 

Qualified subordination clauses, an essential element of such crowdfunding loan agreements, are clearly permissible and effective according to the OGH. Furthermore, the exclusion of the possibility of termination for a certain period of time as well as the binding to termination dates are in accordance with the law.

 

This decision by the OGH leads to more legal certainty in the design and implementation of crowdfunding in the form of subordinated loans.

In its decision of August 24, 2017 (4 Ob 110/17f), the OGH reviewed the admissibility of clauses as part of a crowdfunding model with “qualified subordinated loans” in consumer business. In particular, the “subordination clause”, as well as notice periods and flat-rate compensation for early termination of the loan agreement, were examined.

You can find further details in our current newsletter.

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