Swiss Civil Procedure Law in a Nutshell (Volume 11 of 12)
This blog series provides litigators and corporate counsel from other jurisdictions with a practical understanding of the mechanics, advantages, and limits of litigation before State Courts in Switzerland.
Enforcement of Money Claims
Money claims are enforced by virtue of the Debt Enforcement and Bankruptcy Law. The creditor may either initiate enforcement by virtue of an ex parte freezing order (attachment) or else by a normal summons to pay.
This decision is the latest development in the bitterly disputed enforcement case of a $932 million Swiss arbitration award confirmed by the United States District Court for the Southern District of New York in favor of a Dutch judgment creditor, Sonera Holding B.V. (“Sonera”), against a Turkish judgment debtor, Cukurova Holding A. (“Cukurova”).
1. Nature of process
Chapter 11 used to effect operational restructuring, deleverage balance sheet, and/or commence asset sale of the business as a going concern
Insolvency Act process primarily used to effect a pre-packaged sale of the business or assets effected by administrators (i.e. external qualified appointees).
American and British directors of corporations should be mindful of the different standards of conduct, obligations, and potential personal liability when holding directorships in Turkish companies, particularly if such companies’ financial situation is deteriorating.
Recent development
UK creditor schemes of arrangement under the UK Companies Act 2006 have recently gained popularity as a tool to “amend and extend” or comprehensively restructure debt obligations. In previous client alerts related to the restructuring of bonds issued by DTEK (May 2015) and the standstill scheme of arrangement for Metinvest (February 2016), we outlined some of the common reasons issuers find schemes of arrangement attractive and the types of schemes used to date.
Background
On 6 March 2020, the restructuring of Doncasters Group's 1.22 billion funded debt was completed. Following a successful non-core disposals program, the Doncasters Group (a leading worldwide supplier of high quality engineered components for the aerospace, industrial gas turbine and specialist automotive industries) operates from 12 principal manufacturing facilities based across the United Kingdom, the United States, Germany, Mexico and China.
Alternative assets have enjoyed an unprecedented level of growth over the last decade, which looks set to continue with global AUM growing from $8.8tn in 2017 to a projected $14tn in 20231.
The recent case of 365 Business Finance Ltd v Bellagio Hospitality WB Ltd is a reminder of the need to act quickly when enforcing a Judgment.