Monthly Newsletter July 2024

Restructuring and Insolvency

Hospitals in the emergency room debt restructuring proceedings as a possible restructuring instrument

Josef Caleff, Olivia Wipf

Key Take-aways

1. More and more Swiss hospitals are finding themselves in situations of financial distress due to rising costs.

2. It is the duty of the board of directors as the highest management body of a hospital organized as a Swiss stock corporation to assess and, if necessary, adopt restructuring measures.

When a contracting party declares bankruptcy, it is crucial to grasp the implications for existing contracts. This article highlights the most important legal ramifications for the non-bankrupt parties involved.

Continuation or Termination

Switzerland has a reputation for high-quality banking – holding significant foreign assets and offering a fairly pro-enforcement regime. However, gaps between the different legal cultures means recovering Swiss assets to satisfy foreign judgments from common law jurisdictions may be difficult . Here, we investigate possible solutions.

Supreme Court Case 5A_999/2022 dated 20 February 2024

Alexander Vogel and Marc Baumberger, MLL Legal

This is an extract from the 2024 edition of GRR's Europe, Middle East and Africa Restructuring Review. The whole publication is available here.

For a foreign decree to be recognisable in Switzerland, it is according to the Swiss International Private Law Act, required that the foreign bankruptcy decree is enforceable in the state where it was issued, and there must not be any grounds for refusing recognition, e.g. a violation of Swiss public policy. Furthermore, the decision must have been issued either in the state where the debtor has its seat or domicile or in the state where the debtor has its centre of main interests.

What situations call for a Pre-Pack?

Imagine the following scenario: a debtor, in our case a company, is facing severe financial distress. The company, however, still has certain business units that are profitable. In this situation, it may be sensible for the company to sell only these profitable business units. This proactive approach, if implemented quickly, could preserve business value and jobs while minimising disruption to operations and employees.

The questions are: can a Swiss pre-pack achieve this and if so, how?

If bankruptcy proceedings are commenced against a debtor or if a debtor enters into a court-approved composition agreement with an assignment of all of its assets, transactions executed by the debtor during the last five years are subject to scrutiny.

The purpose of claw back claims is to recover assets extracted from or given away by an insolvent debtor for the benefit of its insolvency estate and ultimately its creditors. Transactions may be subject to claw back actions if:

The events in the last few years have had significant and lasting impacts on business in general and restructuring in particular, with the latter referring to the various options available for firms experiencing difficulties. European economies, hit by both the upheavals caused by the health crisis and geopolitical tensions, have also been a

Global political crises, volatile interests, inflation and supply chain issues challenge many companies. In this blog series, VISCHER's restructuring & insolvency team will show how companies can navigate through these challenges. Here you will find answers to the most important questions regarding the duties of a director of a Swiss subsidiary.

1. What is the group dilemma and what interests must a Swiss subsidiary's board safeguard?

In this blog article, we present the most important legal amendments in relation to the newly adopted Federal Act on Combating Abusive Bankruptcy.

In March 2022, the Swiss Parliament adopted the Federal Act on Combating Abusive Bankruptcy with the aim of preventing debtors from using bankruptcy proceedings to escape from their financial obligations to the detriment of their creditors or to engage in unfair competition with other companies. For this purpose, various laws and ordinances will be amended and the new law is expected to come into force on January 1, 2024.