Former Finance Minister Grasser Files for Personal Bankruptcy

Karl-Heinz Grasser, the former Austrian Finance Minister, has submitted a request for personal bankruptcy at the Kitzbühel District Court. The court is currently assessing whether the conditions for insolvency are met, as announced by the Credit Protection Association 1870 (KSV) on Wednesday.

This legal action follows Grasser's conviction on March 25 by the Supreme Court for embezzlement and accepting gifts, resulting in a four-year prison sentence. Alongside his co-defendant, Walter Meischberger, Grasser is also obligated to pay EUR9.8 million in damages to the Republic of Austria.

Earlier this week, the written judgments were delivered to Grasser and his co-defendants, marking a significant step closer to the commencement of their prison sentences. Grasser has indicated his intention to appeal the verdict to the European Court of Human Rights (ECHR) in Strasbourg, although this appeal does not have a suspensive effect on the sentence.

In Austria, the insolvency law includes specific provisions for liabilities arising from intentional unlawful acts. These types of debts remain enforceable, even after income may be garnished for three to five years down to a subsistence level during a debt adjustment process. Consequently, Grasser can only be relieved of the EUR9.8 million owed to the Republic if he reaches a repayment agreement with the Financial Procuratorate, as explained by AKV insolvency expert Cornelia Wesenauer.

Grasser's attorney, Manfred Ainedter, stated that due to the prolonged duration of legal proceedings, Grasser has faced a lack of income coupled with significant expenses, leaving him with no alternative but to pursue debt restructuring.

As developments unfold, the implications of Grasser's situation for his legal battles and financial future remain to be seen.