SWITZERLAND Law and Practice Contributed by: Urs Hoffmann-Nowotny, Marcel Jakob and Benno Strub, Schellenberg Wittmer Ltd
4.5 The Position of Office Holders in Restructuring, Rehabilitation and Reorganisation
creditors’ meeting. This meeting must take place during the definitive moratorium before the end of the ninth month if the definitive moratorium is to be extended beyond one year. The creditors’ commit - tee supervises the administrator and may issue rec - ommendations. It also takes the role of the court in approving the divestment of fixed assets etc (see 1.2 Types of Insolvency and 4.2 Statutory Restructuring, Rehabilitation and Reorganisation Procedure ). Creditors may appeal against the granting of the definitive moratorium, against the appointment of a specific person as administrator, and against the con - firmation of the composition agreement. The creditors will be called to submit their claims at the beginning of the definitive moratorium and to vote on the com - position agreement. They may also consult the files of the composition proceedings prior to the creditors’ meeting(s). In the case of a composition agreement with assign - ment of assets, the creditors must appoint the liquida - tor and a creditors’ committee. 5. Statutory Insolvency and Liquidation Procedures 5.1 The Different Types of Liquidation Procedure Liquidation procedures primarily apply to corporate entities. Certain regulated entities, such as banks, insurance companies and securities firms, are subject to additional liquidation rules specific to their sector under financial market legislation. Liquidation can be either voluntary or involuntary. • Voluntary liquidation occurs when a financially solvent company’s shareholders decide to dissolve the entity. They do so by passing a corresponding resolution with a qualified majority (usually two- thirds of votes represented) and appointing liquida - tors (then current board members or another party). Upon resolving on a liquidation, the company’s purpose is restricted to actions required to com - plete the liquidation. A company must be solvent and meet its obligations to creditors throughout
The court may, at its discretion, appoint an administra - tor ( Sachwalter ) upon granting a provisional moratori - um or only at the granting of the definitive moratorium. The creditors may elect a different administrator at the extraordinary creditors’ meeting. The administrator’s role is generally to monitor the debtor’s actions and report to the court on the pro - gress of the moratorium. Further specific responsi - bilities include drafting the composition agreement, approving the termination of continuing agreements, making the creditors’ call, drawing up an inventory and convening creditors’ meetings. The administrator is not responsible for managing the business, unless expressly authorised to do so by the composition court. In practice, the administrator’s level of involvement in planning and implementing the actual restructur - ing and the management of the ongoing business depends on the specific case, but also on the relevant administrator’s approach and style. 4.6 The Position of Shareholders and Creditors in Restructuring, Rehabilitation and Reorganisation Involvement of Shareholders Shareholders (that are not also creditors) have a limited role and are usually only indirectly involved if corpo - rate actions are required to implement a restructuring (eg, capital increase). They may generally not prevent or delay composition proceedings. Shareholders must make a reasonable contribution for an ordinary com - position agreement to be approved by the court. How - ever, such contribution cannot be forced against the shareholders’ will. Involvement of Creditors Creditors do not play a specific role during the provi - sional moratorium (which may even be silent and thus unknown to the creditors). When granting the defini - tive moratorium, the composition court may appoint a creditors’ committee. The creditors themselves may appoint a creditors’ committee at the extraordinary
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