SWITZERLAND Law and Practice Contributed by: Daniel Haeberli and Simone Gloor, Homburger
Bank Accounts Security over bank accounts is established by taking security in the receivables against the account bank, and is typically granted in the form of a pledge, but can also be granted by way of security assignment ( Sicherungszession ). However, it is more common for bank accounts to be pledged for the following reasons: • a security assignment is technically a full legal transfer of the receivables to the assignee or security agent, while a pledge only provides for a limited right in rem; and • account banks are concerned about know- your-customer and beneficial owner identi- fication issues, which are evident when the bank accounts are assigned, and the security agent obtains legal title in the respective receivables, which results in the security agent becoming the client of the account bank, at least from the perspective of the account bank. However, some account banks may refuse to accept a pledge of bank accounts, and may even threaten to close the bank accounts and termi- nate the respective banking relationship with the pledgor. In this context, certain banks have established a practice of requiring the pledgor and the security agent to enter into a tripartite agreement with the account bank. Entering into such a tripartite agreement is not necessary to create a pledge or security assignment over a bank account. However, it is important to assess the risk of denying such entry and potentially damaging the banking relationship. In addition, if the assignee (such as the security agent) is the same entity as the account bank, the relevant receivables would cease to exist due to the creditor and the debtor under the bank account receivables having the same identity.
formal shareholder. The perfection of a pledge of shares of a Swiss company generally requires a written security agreement. If the company has issued physical share certificates, it is neces- sary for the share certificate to be delivered to the pledgee or security agent (acting on behalf of the other pledgees) (as applicable) in order to perfect the security. The share certificate must be duly endorsed in blank or assigned in blank (as applicable) by the pledgor. Although a share certificate is not required to create a pledge of shares, it is market practice for the Swiss company to issue one in connec- tion with financings. This is because a share cer- tificate, endorsed in blank, facilitates a private enforcement of the share pledge. In addition, and also in view of a private enforcement, it is recommended to remove any transfer restric- tion on the shares from the company’s articles of incorporation. Alternatively, a board resolution that approves the transfer of the pledged shares to a third-party acquirer upon enforcement of the pledge in advance could be obtained. Inventory Inventory may be pledged or transferred for security purposes ( Sicherungsübereignung ). To perfect such a security interest, the security provider must relinquish exclusive control, and the secured party must obtain physical posses- sion of the inventory. This strict de-possession requirement under Swiss law makes it difficult and impractical to perfect a security interest over relevant inventory without substantially disrupt- ing the business of an operating security provid- er. In most cases, taking possession of inventory is considered to be unduly burdensome, costly and unmanageable; as a result, taking security over inventory is usually not feasible under Swiss law, and inventory is not part of the standard Swiss security package.
479 CHAMBERS.COM
Powered by FlippingBook