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Daniel Hayek

Partner

Chief Executive Officer

Position: Partner
Practice Areas: Banking & Finance , Capital Markets , Corporate & M&A , Dispute Resolution , Insolvency & Restructuring , Venture Capital
Field-Display: Banking & Finance Maincontact , Capital Markets Team , Corporate & M&A Maincontact , Dispute Resolution Team , Insolvency & Restructuring Maincontact , Venture Capital Maincontact , Management

Daniel Hayek is chairman of the board and head of several specialist teams. He focuses on acquisitions of Swiss companies by large strategic buyers as well as on debt restructuring and bankruptcy law. He also specializes in mergers, corporate finance, acquisitions, banking and finance as well as corporate law issues. Daniel Hayek advises clients on all types of domestic and cross-border transactions, including financing and real estate transactions. He also assists banks in acquisition financing.  

E-Mail

+41 44 254 55 55

Linkedin

VCard

Admission to the Bar

Admitted in Switzerland (1993) 

Practice Areas

  • Banking & Finance
  • Corporate & M&A
  • Insolvency & Restructuring

Education

  • New York University (LL.M., 1995)
  • University of Zurich (lic. iur., 1990)

Languages

  • German
  • English
  • French

Memberships

  • Zurich and Swiss Bar Association
  • International Bar Association
  • INSOL EUROPE

Assistants

Florina Berg
+41 44 254 55 39
florina.berg@prager-dreifuss.com

Leonie Meyer
+41 44 254 55 48
leonie.meyer@prager-dreifuss.com

„Leading lawyer in the field of insolvency and restructuring." — IFLR 1000 2020

"Daniel Hayek is a notable practicioner. He advises creditors on bankruptcy proceedings, with further experience in handling insolvency-related litigation." — Chambers Europe 2020

"The team is known for well versed restructuring and insolvency proceedings with complex international aspects, benefiting from a network of counsel in other jurisdictions and relationships with bankruptcy administrators and liquidators. Acts for creditors and other stakeholders, most notably banks and investment funds." — Chambers Europe 2020

„Very comprehensive approach to matters, hands-on and pragmatic problem-solver. He works reliably at an excellent quality and speed." — IFLR 1000 2020

„Highly regarded" — IFLR 1000 2020

Global Leader in Insolvency & Restructuring — Who's Who Legal 2020

National Leader in Insolvency & Restructuring — Who's Who Legal 2020

"Led by Daniel Hayek, the restructuring and insolvency practice of Prager Dreifuss AG is well versed in relevant proceedings and acting for creditors like banks, hedge funds or financial institutions. Hayek is noted for his experience in litigation." — Legal 500 2020

Publications

Subject: Insolvency & Restructuring
Autor: Daniel Hayek, Mark Meili
Paper: The International Comparative Legal Guide

The International Comparative Legal Guide: Project Finance 2021 Switzerland

In the 2021 edition of the International Comparative Legal Guide to Project Finance, Daniel Hayek and Mark Meili discuss common issues in project finance laws and regulations in Switzerland – including security, bankruptcy, restrictions on investments, insurance and arbitration.

Subject: Insolvency & Restructuring
Autor: Daniel Hayek, Mark Meili
Paper: Financier Worldwide
Reading time: 5 Min

Financier Worldwide: Bankruptcy & Restructuring 2021

In the 2021 edition of the InDepth Feature: Bankruptcy & Restructuring 2021, Daniel Hayek and Mark Meili provide an overview of the current economic situation in Switzerland in times of COVID-19 and its impact on corporate bankruptcies and insolvencies. The authors also discuss trends in cross-border restructurings and explain developments in distressed M&A transactions.

Subject: Insolvency & Restructuring
Autor: Daniel Hayek, Mark Meili
Reading time: 5 Min

Issues with the recognition of foreign restructuring plans in Switzerland

On 26 March 2021 the High Court in London sanctioned gategroup's Part 26A restructuring plan. The plan also comprised the Swiss law governed bonds, even though they were issued by a Luxembourg entity and guaranteed by the Swiss gategroup parent. The question remains whether bondholders can still enforce the bonds against the Swiss parent according to its original terms or whether the Part 26A restructuring plan prevents the enforcement of such claims in Switzerland? 

Background

In our newsletter dated 20 February 2021 (The gategroup restructuring: a creative procedure under review), we outlined how gategroup intended to amend its financing arrangements through a newly established UK subsidiary known as gategroup Guarantee Limited (the "UK Company") by proposing a restructuring plan pursuant to Part 26A of the United Kingdom Companies Act 2006 (the "Plan"). The Plan provided for an extension of the maturity of the bonds (the "Bonds"), which are issued by a Luxembourg entity (the "Issuer") and guaranteed by the Swiss gategroup parent (the "Parent"), as well as governed by Swiss law and subject to the exclusive jurisdiction of the Swiss courts.

In its judgment dated 17 February 2021, the High Court in London held that it had jurisdiction to sanction the Plan. The High Court also decided that the Plan fell under the bankruptcy exclusion of the Lugano Convention. Further, the High Court declined gategroup's request to treat senior lenders and bondholders as a single class and ordered separate class meetings for each creditor class. The two meetings took place in mid-march 2021 and both creditor classes approved the Plan. However, turnout among the bondholders was low and only 24.52% by value of the bondholders were present at the bondholders' meeting.  

Judgment sanctioning the Plan

On 26 March 2021 the High Court sanctioned the Plan. The judgment of the High Court raises a number of issues.

First, despite the low turnout at the bondholders' meeting, the High Court was satisfied that the vote was sufficiently representative of the class. It is difficult to see how a bondholders' meeting with such a low turnout can be representative of the whole class. However, since many bondholders are actually Swiss retail investors, it was unlikely that the turnout would be high.

The High Court was also convinced that there was no other restructuring procedure in Switzerland or Luxembourg available to amend the terms of the Bonds. However, according to the Swiss Debt Enforcement and Bankruptcy Act, Swiss debtors have to request composition proceedings to restructure their liabilities in Switzerland. Further, the Swiss International Private Law ("PILA") contains a provision in Art. 174b which allows administrators to coordinate composition proceedings in different jurisdictions if necessary. It cannot be ruled out that the required quorum for bondholders could have been achieved in a composition proceeding in Switzerland, because the bondholders being mainly Swiss retail investors would have been more familiar with a Swiss composition proceeding  and therefore it would have been more likely to draw their attention.

Further, the High Court admitted that the Plan is an obvious case of forum shopping (the High Court called it "good forum shopping") because gategroup incorporated an artificial company in the UK for the sole purpose of taking advantage of a Part 26A restructuring plan. It is at least debatable whether restructuring laws should facilitate corporate restructurings in jurisdictions to which the group does not have any strong links. This leads to the question whether Switzerland's bankruptcy code lacks the instruments to cope with the needs of Swiss companies/groups in distress.

Finally, the biggest issue of the Plan is its potential recognition in other related jurisdictions like Switzerland.

Recognition of the Plan in Switzerland

To prevent a bondholder from seeking repayment of its Bonds according to the original maturity date against the Parent as guarantor of the Bonds, the Plan will have to be recognized in Switzerland. The Lugano Convention does not apply because of the bankruptcy exclusion. Accordingly, gategroup will have to seek recognition on local recognition provisions. The respective Swiss internal law is found in Articles 166 through 175 of the PILA. Under the PILA, a foreign judicial arrangement or composition proceeding is recognized (and enforced) in Switzerland if (i) the relevant foreign act is enforceable, (ii) the relevant foreign act was rendered at the corporate seat or at the COMI of the debtor, and (iii) no grounds for the refusal of recognition are given (cf. Art. 175 in connection with 166 para. 1 PILA).

As regards the first requirement, we understand that the Plan has become enforceable in the UK. As regards the second requirement, the debtor of the Plan which is the UK Company, has been incorporated in the UK, so that the Plan would have been rendered at the seat of the debtor as required by the PILA. However, the UK Company has been incorporated for the sole purpose of facilitating the Plan. One could therefore argue that the incorporation of the UK Company constitutes an illegitimate forum shopping and circumvention of the mandatory provisions of Swiss law, in effect an abuse of law. For the same reasons, and considering that the UK Company has just recently been incorporated, it is also doubtful whether a Swiss court would conclude that the UK Company's COMI is in the UK, in particular as the COMI is not a mere formal requirement but rather one that relates to actual business activities.

Even if the first and second requirement for recognition of the Plan were fulfilled, the question remains whether the intended effects of a recognition would not violate formal or substantive Swiss public policy, thereby excluding recognition to such extent. As the High Court admits in its judgment, it is doubtful whether the Plan has the effect to compromise claims against another debtor (e.g. the Issuer and the Parent). The High Court solved this issue through the implementation of a structure whereby the bondholders grant the UK Company a power of attorney to amend the terms of the Bonds. Although we are not aware of any case law on this third-party issue in Switzerland, we think there are valid reasons to argue that a foreign restructuring plan compromising claims against another debtor violates Swiss public policy, particularly if the link is weak, the other debtor is Swiss (i.e. in this case the Swiss Parent) and the creditors of that debtor are mainly Swiss.

Outlook

In our view it is highly doubtful that Part 26A restructuring plans which relate to a Swiss debtor and restrict creditors' rights can be recognized in Switzerland. Future case law by Swiss courts will show how judges are going to interpret the rules of the PILA in relation to the recognition of Part 26A restructuring plans. In the case at hand, the solution found is most probably an adequate outcome, since the Plan does not restrict creditors' rights extensively. It is therefore doubtful whether any bondholder will seek repayment of the Bonds according to the original terms before restructuring and hence, whether the Plan will have to be recognized in Switzerland at all.

More...
Subject: Insolvency & Restructuring
Autor: Daniel Hayek, Mark Meili
Reading time: 6 Min

The gategroup restructuring: a creative procedure under review

gategroup has proposed a Part 26A in the United Kingdom to restructure its financing arrangements which concern various jurisdictions. In this month's newsletter, Daniel Hayek and Mark Meili discuss the background to this procedure and what questions arise in the context of this cross-border restructuring.

gategroup coping with the effects of the COVID-19 pandemic

gategroup is the world's largest provider of airline catering services. The COVID-19 pandemic and the resulting lockdowns have negatively affected the whole airline industry including gategroup. Because of a significant decline in its revenues, gategroup needed additional financing to cope with the effects of the COVID-19 pandemic.

In terms of financing arrangements, gategroup has senior facilities, mezzanine facilities and bonds in place. To address the financial difficulties due to the COVID-19 pandemic, gategroup's shareholders (the "New Money Lenders") agreed to provide additional financing on condition that the other key financial stakeholders made compromises as well, in particular that the maturity of all the financing agreements would be extended. In November 2020, the New Money Lenders and the lenders under the facilities, amongst others, entered into a lock-up agreement (the "Lock-up Agreement") in which they committed to implement the additional new financing and to restructure the existing financing arrangements. The bondholders were neither party to the Lock-up Agreement nor involved in any related discussions.

The bonds in question (the "Bonds") were issued by gategroup Finance (Luxembourg) S.A., a Luxembourg company, on 28 February 2017. The Bonds are unsecured and guaranteed by the Swiss Parent company, gategroup Holding AG, and are due to mature on 28 February 2022.

How can gategroup extend the maturity of the bonds?

Since the holders of the Bonds (the "Bondholders") were not party to the Lock-up Agreement, the question arose how gategroup could extend the maturity of the Bonds? The obvious mechanism would have been to amend the maturity of the bonds according to the terms of the Bonds, which would require approval from Bondholders at a meeting of holders of 66 per cent. Remarkably, gategroup never made any efforts to call a Bondholders' meeting despite there being enough time to do so. Instead gategroup probably concluded that the quorum in the Bonds' class alone would be difficult to achieve due to a large number of retail investors and any efforts to call a Bondholders' meeting would be pointless.

Subsequently, on 8 December 2020, gategroup incorporated a new company in England and Wales named gategroup Guarantee Limited (the "UK Company"). On 10 December 2020, under a so-called Deed Poll, the UK Company unilaterally assumed the liabilities under the senior facilities and the Bonds. On the same date, the issuer of the Bonds allegedly moved its COMI (centre of main interests) to the UK. One day later, on 11 December 2020, the UK Company proposed a restructuring plan pursuant to Part 26A of the United Kingdom Companies Act 2006 (the "Plan"). In other words, just three day after it had been newly incorporated, the UK Company filed for restructuring due to self-inflicted financial difficulties.

Issues of the Plan

There are certain issues with the UK Company's proposed Plan. Amongst other things, under the Plan, the UK Company proposes to extend the maturity of the Bonds by five years. However, the UK Company is not party to the Bonds and the Bondholders never agreed to become creditor of the UK Company. Further, the terms of the Bonds contain a jurisdiction clause in favour of Switzerland. According to the so-called dovetailing principle (see also our Newsletter of 24 December 2020), restructuring plans that are not within the (EU) Insolvency Regulation must fall within the Recast Brussels Regulation (and since it must be construed in the same way, the Lugano Convention). The Plan is not listed in Annex A of the Insolvency Regulation and therefore falls outside of its scope. When the Plan was launched in December 2020, the UK had not left the EU yet. Hence the Lugano Convention should apply to the Plan according to the dovetailing principle and the jurisdiction clause in favour of Switzerland should be honored. Finally, gategroup suggests that the senior lenders and the Bondholders should form one class for the purpose of voting on the Plan. However, this disregards the fact that their rights are fundamentally different (e.g. different guarantors, maturity and interest rate etc.) and these creditors therefore do not have the required common interest to vote together on the Plan.  

On 3 and 4 February 2021, a convening hearing took place before the High Court in London to decide on the above-mentioned issues. In its judgment dated 17 February 2021, the High Court stated that the Bondholders had become creditors of the UK Company under the Deed Poll.

Further, the High Court broke new ground and ruled that the Plan fell under the bankruptcy exclusion of the Lugano Convention. The judge argued that the dovetailing principle did not apply because the UK had ceased to participate in EU decision-making processes as from 1 February 2020 (disregarding the fact that the UK did not leave the EU before 31 December 2020). The High Court's interpretation of intertemporal law is debatable, but for the future and for restructuring plans filed after Brexit, this interpretation of the Lugano Convention seems to be convincing for non-EU members like the UK.

Finally, it is noteworthy that the Plan proceedings allowed a large Bondholder (our client, a hedge fund) to receive additional information from gategroup (in particular the Deed Poll) it had not had access to before which allowed it to conclude that the Plan was likely to be in the best interests of all creditors including Bondholders. At the fund's request, the UK Company made certain alterations to the Plan documents and agreed to meet the client’s legal costs. Other Bondholders decided to set out their arguments going in the same direction in an unsolicited letter to the High Court, but not to make an appearance in the hearing or the Plan proceedings. Still, because the Bondholders did not have the opportunity for discussions with gategroup, the judge decided to fracture the class and ordered that the senior lenders and the Bondholders be placed into different classes in order for the Plan to proceed. The sanction hearing will take place in March or April 2021.

Short analysis of the effects of the judgment

Bonds issued by a Luxembourg company and guaranteed by a Swiss company and for which there is a exclusive Swiss jurisdiction clause, are being restructured in England by an artificially created company in the UK which is not aparty to the Bonds. Even if this outcome and the interpretation of the Lugano Convention is legally acceptable, the question arises whether this is the procedure the Swiss retail investors agreed to when they invested in the Bonds.

An alternative procedure could have been to amend the Bonds according to the terms of the Bonds, or alternatively, under composition proceedings in Luxembourg and Switzerland. For this purpose, since 1 January 2019, the Swiss International Private Law contains a provision in Art. 174b which allows administrators to coordinate composition proceedings in different jurisdictions. The facts of the case lead to the question if the Swiss bankruptcy code needs more or other instruments to cope with the needs of Swiss companies in distress.

For gategroup it is positive that the Plan can now proceed and the result in this particular case is the right outcome. As a general principle, because the Bonds are not restructured at the seat of the debtor(s) in relation to the Swiss guarantee granted to the Luxembourg issuer, it remains to be decided by the foreign courts whether they will recognize the Plan in their jurisdictions (i.e. the amended terms of the Bonds) if Bondholders would assert their rights according to the initial terms (e.g. ask for redemption of the Bonds on 28 February 2022). The High Court will also in its own view (cf. para. 212 of the judgment) have to consider this question (including the COMI shift) at the sanction hearing.

More...
Subject: Insolvency & Restructuring
Autor: Daniel Hayek, Mark Meili
Paper: PD Newsletter
Reading time: 4 Min

Recognition of a Part 26A Restructuring Plan in Switzerland and the EU

In June 2020, the U.K. introduced the so-called Part 26A restructuring plan. This new type of restructuring plan has the potential to become highly relevant for the restructuring of international corporations. To the best of our knowledge, two Part 26A restructuring plans have been sanctioned by English courts so far. However, the extensive possibilities to restrict creditors' rights under such a restructuring plan may create challenges for its recognition in other jurisdictions. Further, as the U.K. is going to leave the EU at the end of 2020, Brexit may create additional problems for the recognition of a Part 26A restructuring plan in Switzerland and other European countries.

Part 26A Restructuring Plan

UK and EU companies with a nexus to the UK have been using schemes of arrangement under Part 26 of the Companies Act 2006 for centuries to carry out reorganizations. The newly introduced restructuring plan, provided for by Part 26A of the English Companies Act 2006, closely resembles the well-established scheme of arrangement. A major difference is that the Part 26A restructuring plan is limited to companies in financial difficulties, whereas the scheme of arrangement may be used by solvent and insolvent companies. A further distinct feature of the Part 26A restructuring plan is that it only requires the consent of 75 per cent in value in each class of those voting and there are no numerosity requirements as in a scheme of arrangement. Hence, it gives companies the possibility to extensively restrict creditors' rights and even senior classes may be forced into a Part 26A restructuring without having a veto right.

Recognition of a Part 26A Restructuring Plan pre-Brexit

As regards the recognition of a Part 26A restructuring plan in member states of the European Union, the majority of legal scholars are of the opinion that the Brussels I Regulation (recast) and the EU Insolvency Regulation apply mutually exclusively for the recognition of decisions relating to bankruptcy and winding-up. Accordingly, because a Part 26A restructuring plan it is not listed in Annex A of the EU Insolvency Regulation and therefore does not fall within its scope, it must instead be recognized under the Brussels I Regulation (recast).

However, this reasoning does not apply to Switzerland who is not a party to the EU Insolvency Regulation (or Brussels I Regulation (recast)). Rather, from a Swiss law perspective it is relevant that bankruptcy, winding-up, judicial arrangements, compositions and analogous proceedings are explicitly excluded from the scope of the Lugano Convention. In our view a Part 26A restructuring plan falls under this bankruptcy matters exemption and therefore the Lugano Convention would not be applicable to the recognition of a Part 26A restructuring plan in Switzerland.

Consequently, the rules of the Swiss Private International Law Act (PILA) govern the recognition of a Part 26A restructuring plan. Thereunder, the request for recognition will be granted if

  • the foreign act (i.e. the UK court sanctioning the Part 26A restructuring plan) is enforceable in the country in which it has been rendered;

  • the foreign act has been rendered in the country of the debtor’s corporate seat or in the country where the debtor has its centre of main interest (COMI), provided that the debtor was not domiciled in Switzerland at the time of the opening of the foreign insolvency proceedings; and

  • there are no grounds for refusal of recognition under art. 27 of the PILA, i.e. the decision is not incompatible with Swiss public policy.

In particular, the second and third requirement may give rise to legal disputes when recognition of a Part 26A restructuring plan is sought in Switzerland. For example, English courts have in the past (for schemes of arrangement) accepted jurisdiction when the only connection to the UK was that an underlying finance document was governed by English law. However, if the debtor does not have its seat or COMI in the UK, such rather loose connection will not be sufficient to recognize a restructuring plan under the PILA. A further challenge for recognition in Switzerland may be that some creditors (or classes) are not adequately heard or are not treated equally in the Part 26A restructuring process, which contravenes Swiss public policy. It is highly doubtful that Part 26A restructuring plans which extensively restrict creditors' rights can be recognized in Switzerland. Future case law by the Swiss courts will show how judges are going to interpret the rules of the PILA in relation to the recognition of Part 26A restructuring plans.

Recognition of a Part 26A Restructuring Plan post-Brexit

As of 1 January 2021, the UK will no longer be a member state of the EU and cease to be a party to EU treaties like the EU Insolvency Regulation and the Brussels I Regulation (recast). The UK has applied to accede to the Lugano Convention as an independent contracting party but the application has not yet been accepted. It remains to be seen whether the UK's application to the Lugano Convention will be accepted and whether the EU countries will in such case apply the Lugano Convention to the recognition of a Part 26A restructuring plan with an analogous argument as used for the applicability of the Brussels I Regulation (recast) pre-Brexit (see previous chapter). As long as the accession of the UK to the Lugano Convention has not been accepted, the internal private international law of each member state is certainly the main source to consider when it comes to the recognition of a Part 26A restructuring plan sanctioned by a UK court.

From a Swiss perspective, the possible accession of the UK to the Lugano Convention will not make any difference, since the exemption provision of the Lugano Convention will in any case remain applicable. Hence, the procedure under the PILA will still be governing the recognition of a Part 26A restructuring plan.

Outlook

Part 26A restructuring plans may be an attractive restructuring instrument for international companies. However, the recognition of a plan in other countries may prove challenging and proper legal advice in the concerned jurisdictions should be sought before a Part 26A restructuring plan is implemented.

More...
Subject: Insolvency & Restructuring
Autor: Daniel Hayek, Mark Meili
Paper: The Insolvency Review
Reading time: 12 Min

The Insolvency Review 2020: Switzerland

Daniel Hayek and Mark Meili published the Swiss chapter in the latest edition of The Insolvency Review. In this chapter, the authors give an overview of the distinctive features of Swiss insolvency laws and current trends.

Subject: Corporate & M&A
Autor: Daniel Hayek, Mark Meili
Paper: Getting The Deal Through
Reading time: 10 Min

Getting The Deal Through: Joint Ventures 2021 - Switzerland

In this article of Getting The Deal Through, Daniel Hayek and Mark Meili outline the statutory framework for joint ventures in Switzerland and discuss current trends in this area.

Form

Types of joint venture

1. What are the key types of joint venture in your jurisdiction? Is the "joint venture" recognised as a distinct legal concept?


"Joint venture" is recognised as a legal concept in Switzerland, although there is no statutory definition of this term ora body of law that is exclu­sively applicable on joint ventures. Swiss joint ventures take two distinct forms, depending on their legal structure:

  • contractual joint ventures; and
  • equity/corporate joint ventures.

The advantages and disadvantages of those two types originate predom­ inantly from the fact that in one case the joint venture parties can act through a corporate structure. Contractual joint ventures often (but not always) qualify as simple partnerships in the sense of article 530 et seq of the Swiss Code of Obligations and are based on a set of relatively simple contracts. They allow for more flexibility in terms of formation, operation and termination than equity joint ventures. On the other hand, it is not always in the interest of the joint venture parties to operate as a group directly in the respective market, and there is no limited liability.
In contrast, equity joint ventures include an independent legal entity, which is often established for this very purpose. This means that mandatory Swiss law rules applicable to the formation, operation and termination of the joint venture company must be observed. While this is not particularly onerous to the joint venture parties, it is still a factor to consider. The equity joint venture has its main benefits when the common goal requires a distinct entity for marketing purposes or dealing with third parties, or limited liability is a key concern.

Common sectors

2. In what sectors are joint ventures most commonly used in your jurisdiction?


Joint ventures are an instrument that is used in a variety of sectors in Switzerland, for example, construction, heavy industry, beverages, transport, sports marketing, energy and media.

Parties

Rules for foreign parties

3. Are there rules that relate specifically to foreign joint venture parties?


Swiss law does not distinguish between foreign and domestic joint venture parties and it does not prohibit or complicate cross-border joint ventures. Flowever, if the joint venture conducts a regulated business, foreign involvement may be subject to certain regulations. For example, control of a Swiss bank by foreigners requires a special permit, and the direct or indirect acquisition of real estate used for living accom­modation purposes by non-residents is subject to approval. In addition, nationals of third countries outside the EU and EFTA are subject to an immigration regime under which only a limited number of work permits are available. Therefore, joint venture parties from outside the EU and EFTA may find it difficult to staff a joint venture company with a work­ force from their country of origin. Flowever, highly trained employees and specialists will usually receive a working permit.


Ultimate beneficial ownership

4. What requirements are there to disclose the ultimate beneficial ownership of a joint venture entity?


In the majority of cases, Swiss equity joint ventures include a company limited by shares [Aktiengesellschaft). Any person who acquires shares in a company limited by shares that is not listed on a stock exchange and thus reaches or exceeds the threshold of 25 per cent of the share capital or votes (alone or acting in concert) must, within one month, give notice to the company of the first name, surname and address of the natural person for whom it is ultimately acting.

Setting up and operating a joint venture

Structure

5. Are there any particular drivers in your jurisdiction that will determine how a joint venture is structured?


The structure of the joint venture is mainly driven by the joint venture parties' needs.

Tax considerations

6. When establishing a joint venture, what tax considerations arise for the joint venture parties and the joint venture entity? How can tax charges be lawfully mitigated?


Contractual joint ventures are not subject to taxation, offer full tax transparency, and profits and losses accrue directly to the joint venture parties. 
In the case of an equity joint venture, the incorporation of the company is subject to Swiss stamp duty of 1 per cent for its nominal share capital exceeding 1 million Swiss francs. This stamp duty may be mitigated if the joint venture entity is established by contribution in kind of parts of the joint venture parties' businesses. Corporate profits are taxed at federal, cantonal and communal levels. The federal profit tax rate is 8.5 per cent (effective tax rate 7.83 per cent). Tax rates vary between the 26 cantons and between the communes within the cantons, which allows for tax planning. Overall effective profit tax rates (2020) are between 11.9 per cent (Canton of Zug) and 21.6 per cent (Canton of Berne). Many cantons have lowered profit tax rates due to the Federal Act on Tax Reform and AHV Financing, which Swiss voters adopted on 19 May 2019 (eg, Canton of Geneva from 24.16 per cent to 14 percent). Capital tax is raised on the company's equity at variable rates depending on the canton where the company is domiciled, but it is usually below 5 per cent.
A company may apply for a tax holiday if certain conditions are met. Tax incentives are granted on a case-by-case basis, and their extent and duration largely depends on the size of the investment and the impor­tance attributed to the economic development of the canton or region concerned. Such incentives may be either relief or exemption from income and annual capital tax for up to 10 years. Overall, the joint venture parties should carefully analyse the situ­ation and obtain tax advice before they establish the joint venture entity. The Swiss tax regime is very competitive. Searching for a beneficial tax structure within Switzerland will most certainly lead to an attractive result.

Asset contribution restriction

7. Are there any restrictions on the contribution of assets to a joint venture entity?


There are no restrictions on the contributions of assets to a joint venture entity, provided that the relevant assets are tradeable, are available to the company immediately after the contribution, can be capitalised in the balance sheet and the company can liquidate them, if necessary. Contrary to foreign jurisdictions, the obligations of third parties to provide services to the company are not considered contributable assets.

Interaction between constitution and agreement

8. What is the interaction between the constitution of the joint venture entity and the agreement between the joint venture parties?


The articles of association (constitution) of the joint venture entity and the agreement between the joint venture parties are, in principle, sepa­rate items and they do not directly interact with one another. The joint venture parties will mirror their agreement in the articles of associa­tion to safeguard certain aspects of their agreement. In particular, this includes the purpose of the joint venture entity, maintaining the balance of power (ie, the shares the parties hold) between the parties, transfer restrictions of shares, the number of board members, the overall compo­sition of the board and termination of the company if a specific goal is reached. The extent to which this is possible is limited by applicable law. However, since the articles of association are publicly available in Switzerland but the joint venture agreement is not (and there is also no requirement for registration), joint venture parties usually prefer not to include too many details in the articles of association. Additional organi­sational matters are usually included in the organisational by-laws, which is an internal document. Conflicts between the articles of associa­tion and the agreement between the joint venture parties often create a conflict of interests for the board.

Party interaction

9. How may the joint venture parties interact with the joint venture entity? Are there any restrictions?


If the joint venture entity is a company limited by shares, the joint venture parties will typically be the shareholders and benefit from all of the shareholders' rights, including the right to obtain the annual report and the audit report (article 696 of the Swiss Code of Obligations (CO)) and the limited right of information (article 697 CO), which may only be refused where providing such information would jeopardise the company's trade secrets or other interests warranting protection. Under certain circumstances, the board of directors will want to withhold some information if this is required in the interest of the joint venture entity. However, the board of directors may, in principle, share all information with the shareholders informally, as long as all shareholders are treated equally, there are no conflicts with the interests of the joint venture entity and the information is not restricted for other reasons (eg, data protection in relation to customer information). In any event, each joint venture party should ensure that it may nominate a board member. By contrast, in contractual joint ventures, the parties have the right to infor­mation on the status of the joint venture’s affairs, to inspect its books and documents and to obtain a summary statement of its financial position (article 541 CO).

Exercising control

10. How may the joint venture parties exercise control over the joint venture entity's decision-making?


For the protection of the joint venture parties, the joint venture agree­ment may, for example, require that shareholders' meetings are duly constituted only if all shareholders (ie, joint venture parties) are present in the meeting or that specific decisions require an elevated quorum (eg, changes to the joint venture vehicle such as liquidation or a merger or changes to the capital structure). Furthermore, casting votes in favour of a joint venture partner can be provided for in the agreement in the case of deadlock.
Minority shareholders do not enjoy strong protection under Swiss law. However, any shareholder - including minority shareholders - may challenge the validity of resolutions that violate statutory law or the articles of association. In addition, the joint venture agreement can provide for the additional protection of minority investors by, for example, requiring the consent of all joint venture parties for particularly impor­tant decisions, such as those relating to capital expenditure exceeding a specified amount or the sale of important assets.

Governance issues

11. What are the most common governance issues that arise in connection with joint ventures? How are these dealt with?


Joint venture corporations face different governance challenges to, for example, public companies. While public companies may be concerned with stopping self-dealing, the major goal of a joint venture will be to balance the goals of the joint venture undertaking with the individual goals of the partners. Balancing these interests may become a chal­lenge where the founders of a joint venture have representatives on the board of directors and these representatives endorse the interests of the founders. Independent committees and codes of conduct could be used to level out the interests. Further, specialised committees may be helpful, especially where the joint venture engages in the technology or manufacturing business. Focusing on technical issues and resolving disputes relating to technical matters can then be dealt with by such committees.

Nominee directors

12. With an incorporated joint venture, what controls exist in your jurisdiction in relation to nominee directors? How should a nominee director balance the potentially conflicting interests of the joint venture company and the appointing shareholder?


The members of the board of directors of a Swiss company limited by shares are elected by a meeting of shareholders. From that perspective, a board member nominated by a shareholder is no different from his or her fellow board members. In practice, such a nominee director often has an agreement with the appointing shareholder, which may result in conflicting duties towards the appointing shareholder on the one hand and the joint venture entity on the other. When the nominee director decides within his or her margin of discretion, it is considered acceptable that he or she acts based on the instructions of the appointing share­holder. If, however, there is a conflict of interest, the interests of the joint venture entity must take precedence or the nominee director may incur personal liability. This risk can be mitigated to expressly define the support of the joint venture business as a purpose of the joint venture entity in its articles of association.

Competition law

13. What competition law considerations are engaged by the formation and operation of the joint venture? Is approval needed?


Generally speaking, two types of joint ventures can be distinguished from a competition law perspective. They are subject to different compe­tition rules. Full-function joint ventures are joint ventures that perform on a lasting basis all the functions of an autonomous economic entity. If the joint venture is a new entity, business activities from at least one of the controlling undertakings must be transferred to the joint venture for it to be caught by merger control. Such transactions must be notified to the Swiss competition authorities prior to their implementation if the following thresholds are both met:

  • worldwide turnover of the undertakings concerned is at least 2 billion Swiss francs or the turnover in Switzerland is at least 500 million Swiss francs; and
  • at least two of the undertakings concerned each reported a turn­over in Switzerland of at least 100 million Swiss francs (article 9 Federal Act on Cartels).

If the joint venture has no sufficient connection to Switzerland (ie, the joint venture has no intention to operate and generate turnover in Switzerland), a notification may not be required. In each case, however, this should be discussed with the competition authorities. Cooperative joint ventures are joint ventures that are not full-function joint ventures. These are assessed under the rules applying to horizontal agreements. Such transactions can be notified pursuant to article 49a of the Federal Act on Cartels prior to their implementation.

Provision of services

14. What are the key considerations in your jurisdiction in structuring the provision of services to the joint venture entity by joint venture parties?


Generally, the provision of services to the joint venture entity should not create particular issues, to the extent that the board of directors does not outsource its non-transferable and inalienable duties (eg, the overall management of the company, and the organisation of the accounting, financial control and financial planning systems as required for the management).

Employment rights

15. What impact do statutory employment rights have in joint ventures?


The Swiss jurisdiction provides for a dual system for the granting of residence and work permits to foreigners, which distinguishes between EU and EFTA nationals (based on the Agreement on Free Movement of Persons) and non-EU or EFTA nationals, or third country nationals. EU and EFTA nationals only require a work permit for gainful employment lasting for more than three months, irrespective of their qualifications. By decree of the Federal Council, qualified employees from third countries are admitted to the Swiss labour market, in limited numbers only, if they are well qualified and fulfil certain statutory requirements such as being a qualified employee. Statutory requirements include, among others, providing proof that a person cannot be recruited from the labour market in Switzerland or another EU or EFTA member state. Certain exceptions can be made to the admittance requirements, for example, for the transfer of a cadre or specialists within international businesses or joint ventures. Flowever, quotas for work permits exist on both the cantonal and the federal levels and also apply to such excep­tional work permits for qualified workers.

Intellectual property rights

16. How are intellectual property rights generally dealt with on the creation, operation and termination of a joint venture in your jurisdiction?


All assets contributed to the contractual joint venture are then jointly owned by the joint venture parties. Therefore, intellectual property rights are often transferred to the joint venture by way of a licence agreement, whereby the ownership remains with the parties.
However, it is also possible to transfer an intellectual property right to the joint venture entity as a contribution in kind. The valuation of a contribution of an intellectual property right in kind may pose problems, in the event of the bankruptcy of the joint venture corporation or in the event that the contributing party leaves the joint venture corporation. In both cases, an initial under- or overvaluation may lead to liability towards creditors, shareholders or the leaving party.
Regardless of whether the joint venture is organised contractu­ally or by corporation, it is highly advisable to agree on the rights and obligations of the joint venture parties in relation to the ownership and use derived from the joint venture's operations, both during the opera­tional life of the joint venture and in the case of a termination of the joint venture. These should clearly be established in the partnership agree­ment or the licensing agreement. Joint venture parties should keep in mind that Swiss law provides for the employer’s ownership of inventions and designs created by employees (article 332 CO).

Funding the joint venture

Typical funding

17. How are joint ventures generally funded in your jurisdiction? Are there any particular requirements relating to funding and security packages?


In relation to contractual joint ventures, the joint venture agreement should specify the amount and the kind of contributions to be made by each party whereby such contributions can be made in the form of cash, assets or labour and services. Any contribution made to the contrac­tual joint venture is jointly owned by the joint venture parties. Therefore, assets will often be transferred with the right to use or benefit while the ownership of the assets remains solely with the contributor. Usually, the contractual joint venture will cease to exist where one party exits the venture, but the parties are free to stipulate a deviation from that rule in the joint venture agreement. Therein, the parties may also stipulate how the assets contributed by the departing party shall be treated (ie, if they remain with the joint venture or if the leaving party shall be remuner­ated, in which case the amount of the remuneration or the method to calculate such remuneration shall also be stipulated in the agreement).
Joint venture entities in the form of companies limited by shares must have a minimum registered share capital of 100,000 Swiss francs. 
Contributions can be made in cash or in kind, whereby the valuation of contributions in kind may be an issue. Subsequent to the initial capital contribution, the corporate venture can be funded by issuing shares or by incurring debt. Subsequent funding bears the risk of a dilution of voting rights. Further to traditional debt financing (ie, borrowing from banks), instruments such as venture capital and project finance or capital market instruments can provide the required funding. Moreover, the shareholders' agreement of a company limited by shares may require the joint venture parties to provide further funding or guarantees.

Capital injection restrictions

18. Are there any legal or regulatory restrictions on the injection of capital into, or the distribution of profits or the extraction of cash by other means from, the joint venture entity?


Any capital injection into a joint venture company, distribution of profits or other extractions of cash are subject to mandatory Swiss law.
Regarding capital injections, the Swiss Code of Obligations (CO) provides for three types of capital increase: ordinary capital increase (article 650 CO), authorised capital increase (article 651 CO) and contin­gent capital increase (article 653 CO). Capital may further be injected into the corporation by way of capital contributions by shareholders (a fonds perdu payments, ie, payments without consideration). Flowever, since no shares are issued following a capital contribution, the joint venture parties will usually ensure that each party participates in the capital contribution pro rata to its holdings in the joint venture entity.
As for the distribution of profits, under Swiss law, corporate joint ventures may only distribute dividends on the basis of an audited balance sheet that has been approved at the shareholders’ meeting. Further, the dividend must either be paid out of accrued profit or distributable reserves, subject to the allocation of profit to the general legal reserves under statutory law. Generally, shareholders do not have a right to request a corporation to repurchase its shares, and neither may the corporation deprive the shareholder of its shares. Certain exceptions to this principle exist, for example, in the event of a shareholder's failure to fully pay up the subscription price (article 681 CO) or in the event of a squeeze-out (in the context of a public tender offer or a merger).

Tax considerations

19. What tax considerations should be taken into account in the operation of the joint venture?


The distribution of dividends is subject to 35 per cent withholding tax. Based on a double taxation treaty (if applicable), a full or partial refund of the withholding tax may be possible. For intra-group dividends, the notification procedure may be available. Switzerland has an excellent double taxation treaty network, with over 100 treaties currently in place for income tax purposes. Interest payments on loans are subject to Swiss withholding tax only in the case of bonds, bond-like debts and collective fundraising. There is no group relief or consortium relief between the joint venture entity and the joint venture parties available.

Accounting and reporting issues

20. Are there any noteworthy accounting or reporting issues for the joint venture parties regarding their investment in the joint venture?


There are no noteworthy accounting or reporting issues.

Deadlock, Exit and Termination

Deadlock provisions

21. What deadlock provisions are commonly included in joint venture agreements in your jurisdiction?


In an equity joint venture, the parties can give the chairman a casting vote to unlock a deadlock at board level. Flowever, in a 50:50 joint venture, this will give one party a considerable advantage. This effect can be mitigated by alternating the right of appointing the chairman at regular intervals or by electing an independent person to the board who acts as chairman. Sometimes, joint venture agreements provide for the appointment of an independent party who decides the dispute or to implement a joint committee of the joint venture parties (to the extent that the dispute does not relate to non-transferable and inalienable duties of the board or the meeting of shareholders), or even Russian roulette and blind bid clauses. Flowever, the more innovative a solution appears, the higher the risk that it will not work in practice and lead to further issues. Unlocking a 50:50 deadlock is a delicate task and it is difficult to balance any solution with the concept of common control. Therefore, it is recommended to prioritise simple solutions or alterna­tive means to avoid conflicts.

Exit provisions

22. What exit provisions are commonly included? Does the law restrict any forms of mandatory transfer provision or any basis of calculation?


Joint venture projects usually include rather detailed buy and sell arrangements, which grant the parties the right or the obligation to sell their share in the joint venture entity upon the occurrence of certain pre-defined events (eg, a breach of contract). The law does not restrict the mandatory transfer of shares or a specific basis for calculation. Flowever, it may be necessary to enforce the respective provisions before court if there is a dispute between the joint venture parties.

Tax considerations following termination

23. What are the tax considerations on termination of the joint venture?


On the level of the joint venture entity, federal, cantonal and communal profit tax will become due following the realisation of all gains on hidden assets in the event of a liquidation of the joint venture entity. Any distribution of dividends by the joint venture entity to its shareholders (including any transfer of assets that is not done at arm's length) will be subject to 35 per cent Swiss withholding tax. On a Swiss shareholder level, liquidation surpluses represent taxable income unless they are a repayment of existing capital contributions. A participation exemption may be applicable to this income as well.

Disputes

Choice of law and resolution methods

24. In your jurisdiction, are there constraints on the choice of law or the method of dispute resolution provided for in joint venture agreements?


In relation to the joint venture agreement, the parties are free to choose the applicable law and the method of dispute resolution (eg, courts of a particular state or an arbitral tribunal).

Mandatorily applicable local law

25. What mandatory provisions of local law will apply irrespective of the choice of governing law?


Under Swiss law, the enforceability of any agreement is limited by the principle of public policy. The enforcement of foreign judgments made by a court of a state bound by the Lugano Convention are subject to the provisions of the Lugano Convention. Foreign judgments made by a court of a state not bound by the Lugano Convention may not be recognised by the courts of Switzerland, if:

  • the judgment was made by a court that has no jurisdiction;
  • the judgment is not final and binding; or
  • a ground for refusal according to article 27(2) of the Swiss Federal Code on International Private Law is established.

Remedy restrictions

26. Are there any restrictions on the remedies a tribunal can grant that would have a bearing on the arbitration of joint venture disputes? Are there any restrictions on the arbitration of shareholder claims?


If the joint venture parties resort to litigation and the arbitral award provides for a specific performance of the joint venture entity, such specific performance may not be enforceable. Instead, the joint venture agreement should provide for liquidated damages.

Minority investor protection

27. Are there any statutory protections for minority investors that would apply to joint ventures?


The minority shareholders of a company limited by shares enjoy only a few specific statutory rights. While Swiss law does not provide for their right to nominate a representative to the board of directors, minority shareholders do have the right to request a shareholder's meeting onto request that an item be added to the agenda of the meeting, where the minority shareholders represent at least 10 per cent of the share capital or represent shares with a nominal value of 1 million Swiss francs, respectively (article 699 paragraph 3 of the Swiss Code of Obligations (CO)). Minority investors are further protected by article 704 CO, which stipulates that a double majority is necessary for certain important decisions in the shareholders' meeting, and by article 706 CO, which allows all shareholders to challenge the validity of shareholders' reso­lutions violating statutory law or the company's articles of association.
By contrast, in contractual joint ventures where the parties have a simple partnership, the minority investors have by default (and unless stipulated otherwise) additional rights: resolutions are made with the consent of all partners, each party has an equal share in profits and losses regardless of the nature and amount of his or her contributions, each party has a right to receive information, etc.

Liabilities

28. Flow can joint venture parties have liabilities to each other beyond what is expressly agreed in the joint venture agreement?


In a contractual joint venture, each party is liable to the other parties for any loss or damages caused through his or her fault (article 538 para 2 CO). Towards third parties, the partners have personal, unlimited, joint and several liability for obligations contracted jointly or through repre­sentatives, unless stipulated differently in the joint venture agreement (article 544 para 3 CO). Restriction of liability is only possible where a party expressly acts in its own name. Flowever, such liability among the parties is not given if a party acted tortiously.
By contrast, only corporate assets are liable for the obligations of a corporate joint venture. Swiss law provides for personal liability of members of the board of directors and persons engaged in business management or auditing for any damages or losses arising from an intentional or negligent breach of their duties. Corporate law distin­guishes the following types of liability:

  • liability for administration, business management and liquidation (article 754 CO);
  • liability for the issue prospectus (article 752 CO); and
  • liability of auditors (article 755 CO).

The founders of a corporation, members of the board of directors and all people engaged in the founding of the corporation become liable towards the corporation, the individual shareholders and creditors for any losses if they:

  • wilfully or negligently conceal, disguise or give inaccurate or misleading information on contributions in kind, acquisitions in kind or the granting of special privileges to shareholders or other persons in the articles of association, statutory report or a capital increase report, or otherwise act unlawfully in approving such a measure;
  • wilfully or negligently induce the incorporation of the company on the basis of a certificate or deed containing inaccurate information; or
  • knowingly contribute to the acceptance of subscriptions from insol­vent persons.

As a consequence of the limited liability, shareholders will at most lose their proportion of the share capital in the case of a bankruptcy of the corporation. Flowever, the shareholders may have entered into a pooling agreement, in which case they constitute a simple partnership among themselves.

Disclosure of evidence

29. Are there any particular issues that can arise in joint venture disputes in your jurisdiction concerning disclosure of evidence?


Swiss law does not provide for pre-trial disclosure. Rather, the parties determine which evidence they will present to the court in their written briefs. If such a document is, however, in the possession of the other party, the court may order production on request. Pre-trial requests are only possible where evidence may become unobtainable over time or where one party has a legal duty to produce documents. Under Swiss law, certain individuals (a party's family members and certain professionals, such as attorneys or journalists) are not required to give testimony or to produce documents. Flowever, these privilege rights differ in scope. In-house counsels (including attorneys working in an operating joint venture) do not benefit from this legal privilege.

Market overview

Jurisdictional advantages

30. What advantages does your jurisdiction offer for parties wishing to set up and operate joint ventures?


The Swiss jurisdiction offers a quick and easy system for establishing joint venture companies and the necessary flexibility to create a joint venture agreement tailor-made for the joint venture parties' needs. A favourable tax regime and easy access to a qualified workforce are also incentives for establishing a joint venture in Switzerland.

Requirements and restricitions

31. Are there any particular requirements or restrictions relating to joint ventures in your jurisdiction that could deter international investors?


A joint venture entity is subject to mandatory Swiss corporate law, which may limit the structure the joint venture parties would like to implement. For example, article 716a of the Swiss Code of obligations (CO) lists a number of non-transferable and inalienable duties of the board of directors, such as the overall management of the company, the determination of the company’s organisation and notification of the court in the event that the company's balance sheet shows negative equity. This concept of self-management of a company does not always go well together with a joint venture: if the joint venture parties are in agreement, the board wilt, to a large extent, execute decisions made elsewhere. If the joint venture parties are in disagreement, the board may find itself in deadlock. However, this issue is mitigated by the fact that article 716a CO is applied rather selectively. Overall, it seems that these issues are not really a problem in practice.

Update & Trends

Key developments of the past year

32. What are the current trends affecting joint ventures in your jurisdiction? What recent developments in legislation and case law have had an impact on joint ventures?


Against the backdrop of the rise of new technologies and new players (eg, China), it seems that established players have an increased appetite for joint ventures. As most joint ventures resort to arbitration in case of disputes, there is no recent published case law relevant to joint ventures.

Coronavirus

33. What emergency legislation, relief programmes and other initiatives specific to your practice area has your state implemented to address the pandemic? Have any existing government programmes, laws or regulations been amended to address these concerns? What best practices are advisable for clients?


The emergency legislation in Switzerland is mainly addressed to aid companies that have run into serious financial difficulties because of covid-19. in particular, companies are given easy access to loans without interest or at a very low interest rate, unemployment benefits have been extended and the instrument of the moratorium has under­gone certain adjustment for companies that require restructuring. hus, companies with financial problems can benefit from a wide array of solutions, depending on their individual situation.

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Subject: Insolvency & Restructuring
Autor: Daniel Hayek, Mark Meili
Paper: PD Newsletter
Reading time: 3 Min

Expiry of Measures against Bankruptcies – Revival of Duties of Board of Directors

On 14 October 2020, the Federal Council decided not to extend themeasures against bankruptcies caused by COVID-19. The resulting consequences are explained in this newsletter.

Subject: Insolvency & Restructuring
Autor: Daniel Hayek, Mark Meili
Paper: The Restructuring Review

The Restructuring Review 2020: Switzerland

In the latest issue of "The Restructuring Review", Daniel Hayek and Mark Meili provide an overview of the special features of Swiss restructuring law, taking into account the latest legislative developments due to COVID-19.

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Label: Highlight
Subject: Loans / Covid 19
Autor: Daniel Hayek, Mark Meili
Paper: NZZ
Reading time: 4 Min

What comes after the bridging loan?

In the 15 June 2020 issue of the NZZ (New Journal of Zurich), Daniel Hayek and Mark Meili discuss the problems surrounding the repayment of the COVID-19 bridging loans and suggest an alternative approach to the repayment of the loans.

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Subject: Insolvency & Restructuring
Autor: Daniel Hayek, Mark Meili
Paper: Financier Worldwide

Financier Worldwide: Bankruptcy & Restructuring 2020

In the 2020 edition of the InDepth Feature: Bankruptcy & Restructuring 2020, Daniel Hayek and Mark Meili discuss the current economic situation in Switzerland in times of COVID-19 and its impact on corporate bankruptcies and insolvencies. Further, the authors provide an overview over recent legislative developments as well as the risks for managing directors and board members of companies in financial difficulties.

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Subject: Loans / Covid 19
Autor: Daniel Hayek, Mark Meili
Paper: PD Newsletter

New measures in case of imminent or identified over-indebtedness of companies

Last month we showed how companies can restructure and avoid bankruptcy if they run into financial difficulties due to the corona crisis. In the meantime, the Federal Council has enacted new measures to protect companies in the event of imminent or identified over-indebtedness, which are explained here by Daniel Hayek and Mark Meili.

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Subject: Corporate News
Autor: Daniel Hayek
Paper: Legal 500

Managing Partner Daniel Hayek of Prager Dreifuss on the dilemma of culture and change

Managing Partner Daniel Hayek talks in an interview with Legal 500 on the dilemma of culture and change.

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Subject: Loans / Covid 19
Autor: Daniel Hayek, Mark Meili
Paper: PD Newsletter

Consequences of the coronavirus - Contract adjustment and restructuring

With the outbreak of the coronavirus in Switzerland, various legal questions arise for companies, in particular with regard to the validity and amendment of contracts. If insolvency is imminent, measures to prevent bankruptcy are required. The following text provides an overview of the most important points in this context.

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Subject: Loans / Covid 19
Autor: Daniel Hayek

Our approach to COVID 19

Dear Clients, Alumni and Friends

As the global coronavirus (COVID-19) pandemic continues to unfold, the Swiss government has in sum taken the following measures: closed all schools, forbidden all public and private events, closed all restaurants, bars, shops (except food markets, pharmacies and banks) and all entertainment and leisure institutions. They have strongly recommended that everyone stays at home unless working in homeoffice is not possible, they need to go to a doctor’s appointment, grocery shopping or help someone in need.

We would like to share information about the steps Prager Dreifuss has taken to align the government’s efforts to delay the outbreak and to protect the health and safety of our clients, firm colleagues and their families while maintaining business continuity.

We will continue to support our clients‘ needs and navigate them through these challenging times and help them achieve their objectives.

Most employees work remotely from home. Our technical infrastructure is well prepared and everyone can continue working while converting to audio- or videoconferencing. The confidentiality, integrity and availability of all data is at all times secured by way of encription of all our devices.

Our reception and telephone desk is in operation every working day. In order to protect the health of our clients and employees, no meetings are held at our offices.

We will continue to monitor the situation closely and adapt our measures as necessary. We are confident to get through this exceptional situation with united forces and look forward to continuing working with and for you.

It is in such times that we are reminded that besides being your business partner, we are all members of the broader community and as such have a role to play in this evolving situation and we at Prager Dreifuss will do our part.

Stay safe and healthy!

Sincerely,

Prager Dreifuss Ltd.
Daniel Hayek
Chairman

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Subject: Banking & Finance
Autor: Daniel Hayek, Mark Meili
Paper: The International Comparative Legal Guide

The International Comparative Legal Guide: Project Finance 2020 Switzerland

In the 2020 edition of the International Comparative Legal Guide to Project Finance, Daniel Hayek and Mark Meili discuss common issues in project finance laws and regulations in Switzerland – including security, bankruptcy, restrictions on investments, insurance and arbitration.

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Subject: Insolvency & Restructuring
Autor: Daniel Hayek, Mark Meili
Paper: The Insolvency Review

The Insolvency Review 2019: Switzerland

Daniel Hayek and Mark Meili published the Swiss chapter in the latest edition of The Insolvency Review. In this chapter, the authors give an overview of the distinctive features of Swiss insolvency laws.

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Subject: Banking & Finance
Autor: Daniel Hayek, Mark Meili
Paper: IFLR

A guide to cross-border financing in Switzerland

Daniel Hayek and Mark Meili look at the rules, practicalities and latest developments in what continues to be a friendly environment for cross-border financing.

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Subject: Insolvency & Restructuring
Autor: Daniel Hayek, Mark Meili
Paper: The Restructuring Review

The Restructuring Review 2019: Switzerland

Daniel Hayek and Mark Meili published the Swiss chapter in the latest edition of The Restructuring Review. In this chapter, the authors give an overview of the distinctive features of Swiss restructuring laws.

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Subject: Insolvency & Restructuring
Autor: Daniel Hayek, Mark Meili
Paper: Financier Worldwide

Annual Review Bankruptcy & Restructuring

In the 2019 edition of the Annual Review of Bankruptcy & Restructuring, Daniel Hayek and Mark Meili discuss the current economic situation in Switzerland and its impact on corporate bankruptcies and insolvencies. Further, the authors provide an overview over recent legislative developments as well as trends in cross-border insolvencies.

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Subject: Banking & Finance
Autor: Daniel Hayek, Mark Meili
Paper: The International Comparative Legal Guide

The International Comparative Legal Guide: Project Finance 2019 Switzerland

In the 2019 edition of the International Comparative Legal Guide to Project Finance, Daniel Hayek and Mark Meili discuss common issues in project finance laws and regulations in Switzerland - including security, bankruptcy, restrictions on investments, insurance and arbitration.

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Subject: Insolvency & Restructuring
Autor: Daniel Hayek, Remo Wagner

The Subordination of Loans, in particular in the Insolvency of the Involved Parties

Subject: Dispute Resolution
Autor: Daniel Hayek, Mark Meili
Paper: IFLR

IFLR: New law for the recogntion of foreign insolvency decrees in Switzerland

In international insolvencies, the insolvency administrator and creditors have to look for assets of the debtor in foreign jurisdictions. To what extent this is possible depends on the local legal framework. Switzerland applies the concept of territoriality according to which foreign bankruptcy decrees need to be formally recognised. Because in practice the strict legal requirements have sometimes made the recognition of a decree difficult, Swiss legislation has now been revised. A new law removes some of the major burdens and will facilitate the recognition of foreign insolvency decrees. The practical implications of this new law will still have to be looked into.

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Subject: Insolvency & Restructuring
Autor: Daniel Hayek, Laura Oegerli
Paper: The Insolvency Review

The Insolvency Review: Switzerland

In the 2018 edition “The Insolvency Review” Daniel Hayek and Laura Oegerli give a comprehensive overview of the most important aspects of Swiss insolvency law and the newest developments in this area.

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Subject: Insolvency & Restructuring
Autor: Daniel Hayek, Chantal Joris
Paper: The Restructuring Review

The Restructuring Review - Switzerland

Daniel Hayek and Chantal Joris published the Swiss chapter in the latest edition of The Restructuring Review. In this chapter, the authors give an overview of the distinctive features of Swiss restructuring laws.

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Subject: Insolvency & Restructuring
Autor: Daniel Hayek, Chantal Joris
Paper: IFLR

Subordination an der Schnittstelle zwischen Finanzierung und Insolvenz

Der IFLR Beitrag von Daniel Hayek und Chantal Joris folgt dem Vortrag von Daniel Hayek anlässlich der 6. Zürcher Tagung zum SchKG im Februar 2018. Der Artikel betrachtet verschiedene Arten der Subordination an der Schnittstelle von Finanzierungen zum Insolvenzrecht basierend auf den jüngsten betreuten Projekten.

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Subject: Insolvency & Restructuring
Autor: Daniel Hayek

Daniel Hayek: Speaker at the 6th Zurich Convention on Bankruptcy and Restructuring: Recent Practice of Insolvency Law

Daniel Hayek was a speaker at the 6th Zurich convention on bankruptcy and restructuring organised by the Europa Institute at the University of Zurich (EIZ) in February 2018. His presentation addressed the subordination of loans and their effect in the insolvency of the parties involved.

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Autor: Daniel Hayek, Laura Oegerli
Paper: The Insolvency Review

Swiss Chapter on Insolvency Proceedings

In this chapter of "The Insolvency Review" Daniel Hayek and Laura Oegerli give a comprehensive overview of the most important aspects of Swiss insolvency law.

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Autor: Daniel Hayek, Alexander Flink
Paper: Getting The Deal Through

Joint Ventures 2018: Country Chapter Switzerland

Due to its competitive tax regime, the availability of qualified personnel, well developed service sector and geographical location, Switzerland is an excellent location for domestic and cross-border joint ventures. Daniel Hayek and Alexander Flink address the key questions in relation to joint ventures in Switzerland.  

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Autor: Daniel Hayek
Paper: Financier Worldwide

Bankruptcy & Restructuring Roundtable

Daniel Hayek and other expert panellists from reputable law firms share their thoughts on challenges, legal developments, cross-border issues, financing etc. in the increasingly important area of bankruptcy litigation and restructuring proceedings.

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Autor: Daniel Hayek
Paper: The Lawyer

Thought leader: insolvency and restructuring

Daniel Hayek gives an update on the current insolvency and restructuring landscape in Switzerland, recent case law and legislative changes to come.

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Autor: Daniel Hayek, Mark Meili
Paper: The Lawyer

Brexit: Why the UK may consider taking the Swiss approach

Daniel Hayek and Mark Meili discuss the impact of Brexit on jurisdiction clauses and consider that the UK may follow the Swiss approach to replace the Brussels regulation.

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Autor: Daniel Hayek, Alexander Flink
Paper: The Lawyer

The floating charge is no longer a foreign concept

Daniel Hayek and Alexander Flink discuss the option to create a "floating charge" over intermediated securities and the additional flexibility it provides in finance transactions.

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Autor: Daniel Hayek
Paper: International Financial Law Review IFLR

Strategies for Derivative Transactions in Times of negative Interest Rates

The authors discuss the impacts of negative interest rates on derivative transactions in light of new Swiss financial markets regulation. They outline potential risks for parties emanating from the new regulation and highlight similarities with the situation in the EU.    

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Autor: Daniel Hayek, Alexander Flink
Paper: Financier Worldwide

Market Outlook 2016 - Switzerland

Daniel Hayek shares his opinion on the outlook in the Swiss Market. Given that the international economy should improve gradually, he anticipates a moderate acceleration in economic growth in Switzerland over the next year. In view of this rather slow economic upturn, this year, the unemployment rate may slightly rise from the 3.3 percent recorded in 2015, but should start falling again in 2017. Turmoil on the global financial markets has led to excess capital inflow in Switzerland and pushed sovereign bond yields in Switzerland into negative territory. It is to be expected that until the end of 2016 or early 2017 Swiss bond yields will be positive again.

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Autor: Daniel Hayek, Dominik Skrobala
Paper: Financier Worldwide

The effect of the safe harbour ruling in Switzerland

In its landmark ruling of 6 October 2015, the European Court of Justice declared the EU Safe Harbour Framework invalid. Daniel Hayek, Dominik Skrobala and Chantal Joris discuss how the ruling affects Swiss businesses.

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Autor: Daniel Hayek, Alexander Flink
Paper: The Lawyer

Making Guarantees

Daniel Hayek and Alexander Flink are discussing the impact of a decision of the Swiss Federal Supreme Court dated 16 October 2014 on Swiss up-stream and cross-stream limitation language.

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Autor: Daniel Hayek, Chantal Joris, Christina Meyer
Paper: IFLR

Restructuring over liquidation

The authors provide a brief overview of the main novelties in the revised insolvency law. They analyse the impact of the revision on the creditors’ claims resulting from defaulted lease contracts in Swiss insolvency proceedings, drawing on examples of the treatment of aircraft lease agreements in the Swissair composition proceedings.

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Autor: Daniel Hayek, Alexander Flink
Paper: IFLR

IFLR Cross-Border Financing Report 2014 – Länderbericht Schweiz

Autor: Daniel Hayek
Paper: Financier Worldwide

Roundtable Bankruptcy Litigation

Bankruptcy matters come intertwined with complex issues, and the past few years have seen significant developments. Daniel Hayek and other expert panellists from reputable law firms share their thoughts on the most recent developments on international bankruptcy litigation matters.

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Autor: Daniel Hayek, Alexander Flink
Paper: IFLR

Who bears the risk?

Daniel Hayek and Alexander Flink discuss the differences between German and Swiss culpa in contrahendo liability in M&A.

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Autor: Urs Bertschinger, Daniel Hayek
Paper: IFLR

UBS Stabilisation explained

In an interview with International Financial Law Review (IFLR) Urs Bertschinger and Daniel Hayek explain how the November 2013 sale of the Swiss National Bank’s (SNB) StabFund to UBS worked and what this transaction in the amount of 3.762 billion USD means for Swiss Banks.

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Autor: Daniel Hayek
Paper: Lawyer Monthly

Insolveny and Restructuring

Daniel Hayek speaks to the magazine recent developments in the Swiss restructuring and insolvency market, advantages and disadvantages of restructuring programmes as opposed to insolvency and legal challenges and complexities arising when dealing with insolvency in our jurisdiction.

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Autor: Daniel Hayek, Alexander Flink
Paper: IFLR

IFLR Cross-Border Financing Report 2013 – Country Report Switzerland

At-a-glance overview of matters in connection with Switzerland related cross-border financing transactions, such as “10/20 non-banks rule”, guarantee limitations in case of up-stream and cross-stream guarantees and availability of specific types of security under Swiss law.

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Autor: Daniel Hayek
Paper: Financier Worldwide

Bankruptcy Roundtable Litigation

Six partners from international law firms answer questions on challenges, legal developments, cross-border issues, financing etc. in the increasingly important area of bankruptcy litigation.

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