The insolvency law of Switzerland is the law governing insolvency, foreclosure, bankruptcy and debt restructuring proceedings in Switzerland. It is principally codified in the Federal Statute on Debt Enforcement and Bankruptcy.
In terms of insolvency law, the firm assists clients in all stages of debt enforcement proceedings including execution proceedings as foreclosure and receivership in Switzerland.
In Switzerland, creditors may initiate debt enforcement proceedings by filing a debt collection request against the debtor with the competent cantonal debt collection office. This cantonal office will then serve a summons for payment on the debtor.
In case the debtor objected, the creditor must procure a court order dismissing the objection in order to proceed with the enforcement of his claim and confirm the contested debt. If the debtor does not file an objection, or after the objection has been validly dismissed by the courts, the creditor may request execution proceedings to be initiated.
The form of the execution proceedings depends on the nature of the debt and on the legal status of the debtor : execution proceedings are most frequently debt collection by seizure of assets (if the debtor is not a registered commercial entity but a private individual, his assets can be seized and non-liquid assets may be sold at auction), debt collection by realising pledged property (if the creditor’s debt is secured by a pledge or a mortgage, the pledged property may be seized and sold at auction) or debt collection by bankruptcy (if the debtor is a registered commercial entity).
In this case, once bankruptcy is declared, the cantonal bankruptcy office establishes a provisional inventory of the assets and the debtor loses all control over business and assets. If those appear sufficient to cover at least the cost of bankruptcy proceedings, the bankruptcy is published in the Swiss Official Gazette of Commerce, whereby all creditors are asked to submit their claims. Then a creditors’ meeting is called within 20 days, in which the creditors may entrust either a private trustee or the cantonal office with the administration of the bankruptcy. Many court proceedings may be initiated at this time between parties involved (the debtor, the creditors, the bankruptcy administrator, third parties) to determine the validity of the creditors’ claims, their relative rank, the assignment of disputed assets and liabilities to the debtor or to third parties.
Once the situation is established (when schedule of claims, list of assets, liabilities of the debtor are no longer contested), the second creditors’ meeting may decide on the mode of liquidation of the bankrupt business; this may include a sale at auction or a direct sale of assets. The proceeds of the liquidation are discharged to the creditors in accordance to their rank : certain creditors (such as employees for the salaries of up to six months) have higher rank by law and are paid out before all other creditors. To the extent the creditors remain unpaid, they receive certificates to that effect by the cantonal administration, and may initiate new insolvency proceedings against the debtor once he acquire new assets.
Creditors may request the courts to take certain measures to secure the debtor’s assets in order to make them available for eventual liquidation. The most important of these measures are the sequestration of property and the challenge of unfair preferences.
At most stages of the proceedings, the law allows the debtor to stay the proceedings by settling his debts, coming to an accommodation with his debtors or requesting a court to examine the (continued) validity of the debtors’ claims, it being specifed that certain assets that are considered essential to the financial and physical survival of the debtor and his family are exempt from debt collection proceedings.
The firm offers following services :
The firm is also active in advising on liquidation and reorganization of companies, as well as the negotiation and organization of deleveraging.