Information only in English
On 23 February 2011, the Federal Cabinet passed a draft bill that would reform the insolvency law, with a view to facilitating the financial restructuring of enterprises in need. If enacted, the bill would simplify the continuation of enterprises capable of a financial restructuring and therefore safeguard employment, and protect creditors. The main features of the draft bill, which consolidates various reform projects, are as follows:
- Strengthening of the autonomy of creditors: It would be possible to convene a committee of creditors in the opening proceedings;
- Introduction of “shielding procedures”: In the case of imminent illiquidity or over-indebtedness, a debtor would be allowed to develop a financial restructuring plan in self-administration which could thereafter be transformed into the insolvency plan. The shielding procedure could be invoked for a three-month period free from enforcement proceedings and under the supervision of a procurator;
- Extension of the measures under the “plan proceedings”: The available measures under the plan proceedings would be expanded by introducing a debt-to-equity swap;
- Delayed claims: The debtor would receive enforcement protection from the court against claims filed after the plan proceedings were completed;
- Strengthening of clearing houses: The position of clearing houses would be strengthened in the interest of market stability since financial transactions could be completed even if some parties were insolvent;
- Concentration of competencies: The competencies would be concentrated since only one insolvency court per regional court district would be competent; and
- Improved insolvency statistics: The law on insolvency statistics would be reformed to ensure that reliable data on the financial results and outcomes of insolvency proceedings was available.
If you have any questions, please contact Dr. Tim Luthra of Raupach & Wollert Elmendorff Rechtsanwaltsgesellschaft mbH.
