In a recent decision, the Swiss Federal Supreme Court has clarified equitable subordination risks in connection with shareholder loans. The key takeaways are as follows:
In addition to amendments to the Debt Enforcement and Bankruptcy Act (DEBA) and the Criminal Code (SCC), the Federal Act on Combating Abusive Bankruptcy also brings important changes to the Code of Obligations (CO) and the Commercial Register Ordinance (CRO). The new Act aims at increasing the hurdles for a company to release its debts to the detriment of its creditors. The amendments to the law and ordinances are expected to enter into force in January 2024.
Background
Das Bundesgesetz über die Bekämpfung des missbräuchlichen Konkurses bringt neben Anpassungen im Schuldbetreibungs- und Konkursgesetz (SchKG) sowie dem Strafgesetzbuch (StGB) auch wichtige Änderungen im Obligationenrecht (OR) und in der Handelsregisterverordnung (HRegV). Dadurch sollen die Hürden für die Befreiung von Schulden zum Nachteil der Gläubiger künftig erhöht werden. Die Gesetzes- und Verordnungsänderungen werden voraussichtlich im Januar 2024 in Kraft treten.
Ausgangslage
À côté des adaptations à la Loi fédérale sur la poursuite pour dettes et faillite (LP) et au Code pénal (CP), la Loi fédérale sur la lutte contre l'usage abusif de la faillite entraîne d'importantes modifications du Code des obligations (CO) et de l'Ordonnance sur le registre du commerce (ORC). Elle vise ainsi à augmenter les obstacles à la libération des dettes au préjudice des créanciers. Les modifications de la loi et des ordonnances devraient entrer en vigueur en janvier 2024.
Situation actuelle
Business rates liability is complex and the question of who is liable if occupiers become insolvent is one that often arises during periods of economic uncertainty, such as the pandemic.
Business rates liability for insolvent companies
Business rates liability attaches to specific units of property known as “hereditaments”.
One difficulty encountered by creditors and trustees in bankruptcy is the use of one or more aliases by a bankrupt. Whether it is an innocent use of a nickname or an attempt to conceal one's identity, the use of an alias can often create problems for creditors seeking to pursue debts and for trustees seeking to recover assets held by a bankrupt.
How does it happen?
Le 16 avril 2020, le Conseil fédéral avait adopté l'Ordonnance COVID-19 insolvabilité. L'un de ses principaux objectifs était de diminuer la pression subie par les organes d'administration des entreprises suisses quant à leur obligation d'aviser le juge d'un surendettement (« dépôt du bilan »). L'allègement visait principalement les situations de surendettement causées par les effets négatifs de la pandémie de COVID-19 sur les liquidités, le bénéfice et les perspectives de continuité d'exploitation.
On 16 April 2020, the Swiss Federal Council enacted the COVID-19 Insolvency Ordinance. One of its main goals was to relieve pressure on executive bodies of Swiss entities to request the opening of insolvency proceedings. Relief was targeted at overindebtedness situations caused by negative impacts of the COVID-19 pandemic on liquidity, earnings and going-concern prospects. Further, the Swiss Federal Council put in place a special COVID-19 moratorium which was designed for SMEs. On 14 October 2020, the Swiss Federal Council decided not to extend such measures beyond 19 October 2020.
As concerns about illegal phoenix activity continue to mount, it is worth remembering that the Corporations Act gives liquidators and provisional liquidators a powerful remedy to search and seize property or books of the company if it appears to the Court that the conduct of the liquidation is being prevented or delayed.
In a decision of 5 May 2020, a district court in the Canton of Zurich approved the transfer of business units of a debtor in a so-called pre-pack transaction simultaneously with the grant of a provisional debt restructuring moratorium. "Pre-pack" transactions in which a sale of debtor's assets are prepared prior to, but in view of, subsequent composition proceedings are still relatively rare in Switzerland. The most recent judgement sets out clearly the relevant requirements and provides a helpful guideline for future transactions.