Vol 14 (2017) - Issue 5

Article preview

Debt Restructuring and Bankruptcy Proceedings under Swiss Law: When the Court Decides in the Company's or Creditors' Stead

1. Introduction
Swiss law recognises two types of court supervised proceedings to deal with a company in financial distress: the bankruptcy proceedings and the debt restructuring proceedings. The company in financial distress often has to have a look at its options and decide which one is in its best interests and the best interests of its creditors. Both proceedings have different purposes and that is why the decision should not be taken hastily. In some cases, the court can take the decision in the company’s or creditors’ stead if the company has filed a request with the court which does not reflect the company’s financial situation and the company’s financial future perspective. First we will give a brief overview of the purpose and the opening procedure of the bankruptcy proceedings and the debt restructuring. Secondly, we will present two recent decisions rendered by the Swiss Federal Supreme Court which illustrate the difficulties a company can face in meeting the conditions of debt restructuring proceedings.