UPDATED 3 AUGUST 2020
Updates marked with *
Updated: Ireland, Israel
We take a look at some of the recent emergency legislation and measures implemented by various nations around the world in response to COVID-19. As this is a rapidly developing crisis, please ensure you keep a close eye on the Lexology Coronavirus hub page for the most up-to-date information.
The ongoing COVID-19 pandemic has profoundly reshaped the global business landscape. Some companies that only months ago seemed unstoppably profitable have been brought to an existential brink by extended lockdowns, supply chain failures, and other obstacles caused by the pandemic. Other companies who have experienced less disruption (or in some cases windfalls) stand at the threshold of opportunity even as they prepare themselves for the challenges of the 'new normal'.
On 19 June 2020, following the consultation, the Federal Council adopted the dispatch on the partial revision of the Swiss Federal Banking Act (Bundesgesetz über die Banken und Sparkassen, Bankengesetz). The legislative amendment intends to strengthen customer and depositor protection and promote system stability.
The partial revision focuses on three main areas: (i) the restructuring proceedings for banks, (ii) deposit insurances and (iii) intermediated securities.
Foreign bankruptcy and insolvency decrees generally remain without legal effect in Switzerland. A foreign bankruptcy or insolvency decree must first be recognized by the competent Swiss court. In a newly published decision, the Swiss Federal Supreme Court further clarified the recently revised provisions governing the recognition and the following procedure.
Introduction and background
In einem Entscheid vom 5. Mai 2020 hat ein Zürcher Bezirksgericht gleichzeitig mit der Gewährung einer provisorischen Nachlassstundung die Übernahme einzelner Betriebsteile der Schuldnerin als sogenannte pre-pack Transaktion genehmigt. Das Instrument des "Pre-pack", bei dem ein Verkauf von schuldnerischen Vermögenswerten vor, aber im Hinblick auf ein nachfolgendes Nachlassverfahren vorbereitet wird, ist in der Schweiz noch wenig verbreitet.
Par décision du 5 mai 2020, un tribunal de district zurichois a approuvé la reprise de parties d'une entreprise d'une débitrice sous forme d'une transaction dite de « pre-pack » (préemballage), simultanément à l'octroi d'un sursis provisoire. L'outil du « pre-pack », dans lequel la vente des actifs du débiteur est préparée par avance, en vue d'une procédure ultérieure de sursis concordataire, est encore peu utilisé en Suisse.
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.
The COVID-19 regulation on insolvency law set out the conditions under which COVID-19-related over-indebtedness of the company does not to lead to a declaration of bankruptcy by the board of directors (see our blog post "COVID-19 Deferral of Bankruptcy Filing in Switzerland").
Luc Defferrard and Tervel Stoyanov, Walder Wyss Ltd
This is an extract from the 2020 edition of GRR's the Europe, Middle East and Africa Restructuring Review. The whole publication is available here.
In summary