Thema: Corporate & M&A

Unternehmenssanierung gemäss revidiertem Aktienrecht

Das revidierte Schweizer Aktienrecht tritt am 1. Januar 2023 in Kraft. Daniel Hayek und Mark Meili besprechen die Folgen des neuen Sanierungsrechts anlässlich der Revision des Schweizer Aktienrechts, und erklären wie Aktionäre und Gläubiger, die an Unternehmensumstrukturierungen beteiligt sind, ihre Interessen vor und nach dem 1. Januar 2023 schützen können.


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Daniel Hayek and Mark Meili of Prager Dreifuss explain the consequences of changes to Swiss company law, and how shareholders and lenders involved in company restructures can protect their interests before and after January 2023

Revising Switzerland’s company law was discussed for many years until, in June 2020, the Swiss parliament finally approved a comprehensive revision of the law. The revised law will come into force on January 1 2023.
Among other things, the provisions relating to corporate restructurings of Swiss companies limited by shares (Aktiengesellschaft) will be amended. These amendments are discussed in more detail in this article.
For reasons of readability, the article refers only to Swiss companies limited by shares. However, the changes apply mutatis mutandis also to the other types of company with legal personality, in particular the Swiss limited liability companies (GmbH).

Existing framework

According to the existing version of the Swiss Code of Obligations (CO), the board of directors of a Swiss company limited by shares has a statutory general duty to monitor the financial situation of the company. If the company runs into financial problems, the board of directors must take appropriate action.
Presently, two scenarios of financial distress are addressed by law. Article 725 and those following it in the CO lay out specific duties for the board of directors.
First, if the last annual balance sheet shows that half of the share capital and the legal reserves of the company are lost and are no longer covered by assets (so-called capital loss), the board of directors must, without delay, convene a general meeting and propose financial restructuring measures.
Second, where there is good cause to assume over-indebtedness of the company (the balance sheet shows negative equity) and an audited interim balance sheet shows that the claims of the company’s creditors are not covered (either at the going concern or liquidation values), the board of directors must notify the court.
The notification requirement may be waived if company creditors subordinate their claims to those of all other company creditors to the extent of the capital deficit. Under the existing case law, it is also permissible for the board of directors to delay the notification to the court for a certain time period (the length of which depends on the specific circumstances; usually 60 days will be acceptable) to commence promising restructuring actions (so-called silent restructuring). If the board of directors fails to notify the court in due time, this can give rise to civil liability claims.
Upon receiving notification, the court will generally begin insolvency proceedings. The court may, upon request by the board of directors or a creditor, grant a stay of insolvency proceedings where there is a prospect of financial restructuring, and order measures to preserve the company’s assets in the meantime.
In practice, these statutory instruments are hardly ever successful, because measures are usually only undertaken when the company is already suffering from serious financial difficulties. Most proceedings therefore end up in insolvency proceedings. The legislator has tried to address these shortcomings by revising Swiss company law.

Revised framework and the introduction of additional solvency measures

Revised Swiss company law provides that the board of directors shall initiate restructuring measures not only in the case of a capital loss or over-indebtedness, but also earlier in the event of insufficient liquidity.
According to Article 725 of the revised CO, the board of directors must also monitor the company's solvency, which in practice means it must draw up a liquidity plan. The liquidity plan serves as an early-alert system to detect an emerging financial crisis. Under the incoming law, if the company is in actual danger of becoming insolvent and can no longer meet its liabilities when they become due, the board of directors must take appropriate measures to strengthen the solvency of the company.
Article 725 of the revised CO envisages a cascading restructuring system, provided that there are realistic prospects of restructuring the company. The new law directs the board of directors to first choose short-term and straightforward measures such as taking out a loan. If additional measures are required to address the company's liquidity problems, the board of directors must agree on more sustainable steps – such as increasing the capital of the company – and, where required, propose them to the general assembly. The revised Swiss company law also stipulates that the board of directors may apply for a debt moratorium if needed, which is appropriate if a court-approved composition agreement with all creditors is sought.
In addition to the provisions that address the company's solvency, the existing rules on capital loss and over-indebtedness remain in place with some minor amendments (Articles 725a and 725b of the revised CO).
The provisions in relation to capital loss (Article 725a of the revised CO) provide that the board of directors is no longer required to convene a general meeting under all circumstances, but only if the proposed measures to address the capital loss fall within the shareholders' competences.
Further, and in contrast to the current framework, the company may, as a general rule, not do away with the audit of its annual balance sheet in the case of a capital loss. An exception can only be made if the board of directors has applied for a debt moratorium.
Article 725b of the revised CO still stipulates that, where the board of directors has good cause to assume over-indebtedness, an audited balance sheet appraising the assets at going concern and liquidation values needs to be drawn up to determine whether the claims of the company’s creditors are covered.
However, in contrast to the current framework, the company will no longer be required to prepare a balance sheet at liquidation values if the company is assumed to be a going concern and the assets appraised at going concern values show that the claims of the company's creditors are covered.
If the balance sheet shows that the company is over-indebted, the board of directors must still notify the court. As in the existing legal framework, the notification may be waived if company creditors subordinate their claims (according to the revised law including interest claims) to those of all other company creditors to the extent of the existing over-indebtedness.
Codifying existing practice, the incoming regime envisages that the notification of the court may be delayed for a silent restructuring for a maximum of 90 days after the audited balance sheet becomes available. According to the unambiguous statutory provision, an extension of this deadline is not possible, even if a longer period may be appropriate in a particular case, for example in large and complex matters.
In contrast to the existing law, after the notification, the court may no longer grant a stay of insolvency proceedings where there is a prospect of financial restructuring. However, the court may grant a stay if an immediate restructuring or the conclusion of a composition agreement look likely.

Granting (restructuring) loans and avoidance actions

If shareholders or other affiliated persons grant a loan to a company in financial distress, there are two associated risks. First, parties risk that the bankruptcy administration requalifies the loan as substitute equity (kapitalersetzendes Darlehen) because it is viewed as a hidden equity contribution. Second, the repayment of a loan by the borrower may be subject to avoidance claims (clawback actions).
In the former case, if a loan is requalified as equity, a lender will only receive a bankruptcy dividend after all other creditors have been fully satisfied, which is unlikely to happen in bankruptcy proceedings.
In the course of the revision of Swiss company law, the legislator discussed a statutory provision as to when a loan will be requalified. However, the idea was abandoned due to practical considerations. Guidelines as to when a loan might be requalified therefore need to find their basis in the case law of the courts. The legislator highlighted that, according to case law by the Swiss Federal Supreme Court, a loan to a company in financial distress should generally be considered an ordinary loan subject only to the rules governing the abuse of rights.
In the wake of the company law revision, parliament also slightly amended the Federal Act on Debt Enforcement and Bankruptcy (DEBA) in relation to avoidance claims. Until now, only a court or the creditors' committee could exempt certain legal acts from being contested.
The amended DEBA, which will also come into force on January 1 2023, provides a tool for the administrator to consent to liabilities entered into during a debt moratorium phase, which protects them from being subject to avoidance claims. Therefore, with the administrator’s consent, reorganisation acts, in particular with regard to loans, can be undertaken quickly and without the risk of avoidance.
However, this protection does not extend to acts carried out prior to a debt moratorium (or bankruptcy proceedings) which still risk being subject to avoidance claims. Presently, according to Article 288 DEBA, all acts carried out by a debtor up to five years prior to the initiation of bankruptcy proceedings or five years prior to the notification of the debt moratorium are voidable, if carried out with an intent to harm the debtor’s creditors or to favour certain creditors to the detriment of the others, and if that intent was apparent, or should have been apparent, to the counterparty.
Therefore, the repayment of unsecured loans by a distressed company implies a risk of avoidance. This is mitigated by the case law of the Swiss Federal Supreme Court which states that a restructuring loan (and in particular, the repayment of such a loan prior to the opening of bankruptcy proceedings or the notification of a debt moratorium) is exempt from the avoidance rules. To qualify as a restructuring loan, the loan must have been granted for the purpose of helping the company to implement restructuring measures which demonstrably had a positive restructuring forecast.
Within the scope of avoidance claims, the granting of new security is also a highly debated issue. It can become relevant if a lender asks for additional security instead of the repayment of the loan. Article 287 DEBA states that the granting of new collateral for existing obligations, to which the debtor was not contractually obligated, is voidable, if carried out by an over-indebted debtor up to one year prior to the opening of bankruptcy proceedings or one year prior to the notification of the debt moratorium against the debtor. Avoidance actions are not possible if the beneficiary can prove that it did not know the debtor was over-indebted and was not required to know this.
Because of this provision, the granting of new or additional security one year before insolvency or a debt moratorium brings an increased risk of being subject to an avoidance claim. To minimise this risk, we recommend lenders to ask for security at an early stage (preferably when the loan is granted and the company is still in good financial condition).
If that is not possible, lenders should initially agree on a contractual obligation to grant or perfect security interests at a later stage. Such undertakings remain binding and are not subject to avoidance claims.


The revision of Swiss company law brings about a desirable update and codification of existing practice. It remains to be seen whether the new framework will support restructuring efforts in a more targeted manner and prevent insolvency proceedings to a larger extent.
Compared to the existing framework, the board of directors has additional obligations to act if the company is in financial distress. If the board of directors fails to take measures or takes measures only with a delay, the directors may be held liable by shareholders and creditors for the resulting damages. Companies and their directors should therefore proactively prepare for the new law, revise their internal processes and set up the appropriate structures to comply with the new requirements.
Shareholders and lenders involved in the restructuring of a company need to be aware of the complex legal framework surrounding this topic in order to safeguard the enforceability of their claims (and their collateral) and protect them from avoidance claims.