{"id":144762,"date":"2026-07-08T11:19:07","date_gmt":"2026-07-08T11:19:07","guid":{"rendered":"https:\/\/my.legal500.com\/guides\/?post_type=comparative_guide&#038;p=144762"},"modified":"2026-07-10T08:08:08","modified_gmt":"2026-07-10T08:08:08","slug":"liechtenstein-restructuring-insolvency","status":"publish","type":"comparative_guide","link":"https:\/\/my.legal500.com\/guides\/chapter\/liechtenstein-restructuring-insolvency\/","title":{"rendered":"Liechtenstein: Restructuring &amp; Insolvency"},"content":{"rendered":"","protected":false},"template":"","class_list":["post-144762","comparative_guide","type-comparative_guide","status-publish","hentry","guides-restructuring-insolvency","jurisdictions-liechtenstein"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">BATLINER WANGER BATLINER Rechtsanw\u00e4lte AG<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2026\/07\/BWB-23-Logo.jpg\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">BATLINER WANGER BATLINER Rechtsanw\u00e4lte AG<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2026\/07\/BWB-23-Logo.jpg\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of Restructuring &amp; Insolvency laws and regulations applicable in Liechtenstein<\/span><div class=\"guide-content\"><div class=\"filter\">\r\n\r\n\t\t\t\t<input type=\"text\" placeholder=\"Search questions and answers...\" class=\"filter-container__search-field\">\r\n\t\t\t<\/div>\r\n\r\n\t\t\t\r\n\r\n\r\n\t\t\t<ol class=\"custom-counter\">\r\n\r\n\t\t\t\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What forms of security can be granted over immovable and movable property? What formalities are required and what is the impact if such formalities are not complied with?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Security over immovable property is created in the form of pledges (mortgages). A mortgage may only be created as a registered mortgage (Grundpfandverschreibung; Art. 296 et seq. Property Law Act, Sachenrecht, hereafter &#8220;SR&#8221;) or as a registered mortgage certificate (Register-Schuldbrief; Art. 319 et seq. SR).<\/p>\n<p>A mortgage may only be created to secure a specific claim. It comes into existence upon registration in the Land Register (Art. 271 SR). Registration requires a legal basis, an application to the Land Register, and the applicant\u2019s power of disposal. The legal basis may arise either from a transaction or by operation of law. In practice, the mortgage agreement is the predominant legal basis. It is the contractual undertaking between the owner of the property and the creditor of the secured claim.<\/p>\n<p>A registered mortgage serves to secure any present, future or merely possible claim (Art. 296 para. 1 SR). The mortgaged property need not be owned by the debtor (Art. 296 para. 3 SR). The registered mortgage is accessory in nature. If the secured claim ceases to exist, the owner of the encumbered property may request deletion of the entry (Art. 298 para. 1 SR). The mortgage is registered in a specific mortgage rank and retains its rank irrespective of subsequent fluctuations after registration (Art. 297 para. 1 SR).<\/p>\n<p>By contrast, a registered mortgage certificate creates a personal claim secured by a mortgage over immovable property (Art. 319 para. 1 SR). The debtor is therefore liable not only with the property, but with all of its assets. The registered mortgage certificate is registered in the name of the landowner or the creditor. It is transferred by registration of the new creditor in the Land Register (Art. 322 para. 2 SR). The registered mortgage certificate may itself be pledged, which likewise requires registration of the pledgee in the Land Register (Art. 323 SR).<\/p>\n<p>Security over movable property and rights may also be created by way of pledge. With respect to movable property, Liechtenstein law follows the possessory pledge principle, meaning that the valid creation of a pledge requires physical delivery of the pledged asset. The pledge of a claim for which no document exists, or for which only an acknowledgement of debt exists, requires a written pledge agreement and, where applicable, delivery of the acknowledgement of debt (Art. 385 para. 1 SR). The pledge of other rights requires, in addition to a written pledge agreement, compliance with the form required for the transfer of those rights (Art. 385 para. 4 SR). In the case of bearer instruments, delivery of the instrument to the pledgee is sufficient (Art. 386 para. 1 SR). In the case of other securities, delivery of the instrument together with an endorsement or assignment is required.<\/p>\n<p>Whereas the creation of a pledge does not affect ownership of the pledged asset, security transfer of title and security assignment involve a transfer of ownership or title to the creditor.<\/p>\n<p>A security transfer of title is a fiduciary transaction. The debtor, or a third party, transfers ownership of a specific asset to the creditor as security for a claim, with the agreement that the creditor may use the asset only to the extent required for the security purpose and must retransfer it to the previous owner once the secured claim has ceased to exist. A security assignment is an assignment of claims for security purposes. Various provisions governing pledges apply by analogy to security transfers of title and security assignments. In particular, the possessory pledge principle must not be circumvented.<\/p>\n<p>Special rules apply to financial collateral arrangements (see Art. 392 et seq. SR). The creation of financial collateral must be evidenced in writing and must allow the relevant financial collateral to be identified.<\/p>\n<p>Non-compliance with the above requirements for the valid creation of a security right means that the security right does not validly come into existence and is therefore not enforceable.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What practical issues do secured creditors face in enforcing their security package (e.g. timing issues, requirement for court involvement) in out-of-court and\/or insolvency proceedings?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The enforcement of security rights depends on the type of security, the terms of the security agreement and whether insolvency proceedings have been opened.<\/p>\n<p>In principle, Liechtenstein law recognises both judicial and, subject to mandatory statutory provisions and the parties\u2019 contractual arrangements, out-of-court enforcement mechanisms. What is not permitted is an agreement under which the pledged asset automatically falls into the creditor\u2019s ownership if the creditor is not satisfied. Special provisions apply to financial collateral arrangements (Art. 394 et seq. SR).<\/p>\n<p>Judicial enforcement is carried out by initiating court enforcement proceedings under the Enforcement Act (Exekutionsordnung; hereafter &#8220;EO&#8221;). This requires an enforceable title, such as a court judgment, a payment order in debt collection proceedings, a court settlement or an arbitral award. The method of realisation depends on the enforcement asset. In the case of immovable property, enforcement may take place, for example, by compulsory auction or compulsory administration.<\/p>\n<p>Liechtenstein law does not, in principle, impose material obstacles to private realisation. Judicial enforcement may, however, take longer, particularly because an enforceable title must first be obtained.<\/p>\n<p>If insolvency proceedings are opened over the debtor\u2019s assets, secured creditors either have rights to the segregation of specific assets from the insolvency estate (Aussonderungsrechte) or rights to separate satisfaction from the realisation proceeds of specific assets (Absonderungsrechte). This does not apply to preferential rights newly acquired by judicial enforcement within the last 60 days before the opening of insolvency proceedings, except for preferential rights acquired for public charges (Art. 25 Insolvency Act, Insolvenzordnung, hereafter &#8220;IO&#8221;).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What restructuring and rescue procedures are available in the jurisdiction, what are the entry requirements and how is a restructuring plan approved and implemented? Does management continue to operate the business and \/ or is the debtor subject to supervision? What roles do the court and other stakeholders play?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Liechtenstein insolvency law provides for restructuring proceedings (Sanierungsverfahren; Art. 118a et seq. IO) and insolvency proceedings with a subsequent restructuring plan (Art. 96 et seq. IO).<\/p>\n<p>Restructuring proceedings are available where the debtor applies for the opening of insolvency proceedings and at the same time requests acceptance of an admissible restructuring plan. Restructuring proceedings may also be opened where insolvency is merely imminent.<\/p>\n<p>In addition, a restructuring plan may also be requested in insolvency proceedings that have already been opened. The debtor may request the conclusion of a restructuring plan either together with the opening application or later, up to the termination of the insolvency proceedings. The application must state how the creditors are to be satisfied or secured. If the application is rejected as inadmissible, rejected by the creditors, withdrawn by the debtor or not confirmed by the court, the insolvency proceedings continue.<\/p>\n<p>Within restructuring proceedings, a distinction must be made between proceedings without debtor-in-possession management and proceedings with debtor-in-possession management.<\/p>\n<p>The opening of restructuring proceedings without debtor-in-possession management requires a corresponding application by the debtor and submission of an admissible restructuring plan.<\/p>\n<p>Further requirements apply to restructuring proceedings with debtor-in-possession management. The debtor must submit: (i) a restructuring plan offering to pay insolvency creditors at least 20% of their claims within no more than two years from acceptance of the plan; (ii) a precise list of assets providing a current and complete overview of assets and liabilities; (iii) a financial plan for the following 90 days; and (iv) a list of creditors to be notified. The application must also contain information on how the funds required for the plan are to be raised, the number of employees and the necessary reorganisation measures. Where accounting obligations exist, balance sheets must be submitted.<\/p>\n<p>If the restructuring plan application is timely and admissible, the Princely Court of Justice must schedule a restructuring plan hearing within no more than six weeks. Acceptance by the creditors requires both a headcount majority and a capital majority of the insolvency creditors present and entitled to vote. The plan also requires confirmation by the Princely Court of Justice.<\/p>\n<p>In restructuring proceedings with debtor-in-possession management, administration of the insolvency estate remains with the debtor, but under the supervision of an insolvency administrator (acting as restructuring administrator). Subject to such supervision, the debtor is entitled to continue operating its business and, in principle, to carry out all legal acts unless they are expressly reserved to the restructuring administrator. However, certain acts are prohibited, in particular the sale or encumbrance of real estate, the creation of preferential rights, the assumption of guarantees and gratuitous dispositions. The debtor must also refrain from any act objected to by the restructuring administrator. Legal acts carried out contrary to these rules are ineffective vis-\u00e0-vis the creditors if the third party knew or should have known that the restructuring administrator had objected.<\/p>\n<p>Certain core areas remain reserved to the restructuring administrator, namely insolvency avoidance, examination of claims and realisation of assets.<\/p>\n<p>Debtor-in-possession management may be revoked by the Princely Court of Justice, in particular if disadvantages for the creditors are to be expected.<\/p>\n<p>In restructuring proceedings without debtor-in-possession management and in bankruptcy proceedings, the power of disposal over the insolvency estate passes to the insolvency administrator appointed by the court.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can a debtor in restructuring proceedings obtain new financing and are any special priorities afforded to such financing (if available)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The debtor may obtain new financing during restructuring proceedings. This also applies in restructuring proceedings with debtor-in-possession management. However, the creation of security is restricted. The debtor may not encumber real estate, create preferential rights or assume guarantees. To the extent that new liabilities arise from permissible legal acts of the debtor, they may qualify as estate claims.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can a restructuring proceeding release claims against non-debtor parties (e.g. guarantees granted by parent entities, claims against directors of the debtor), and, if so, in what circumstances?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Restructuring proceedings or a restructuring plan cannot, in principle, unilaterally release or restrict claims against third parties who are not themselves debtors. The rights of insolvency creditors against guarantors or co-debtors of the debtor, and against persons liable in recourse, cannot be restricted by the restructuring plan without the express consent of the entitled parties.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How do creditors organize themselves in these proceedings? Are advisory fees covered by the debtor and to what extent?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Liechtenstein law does not provide for separate creditor classes or ad hoc creditor committees comparable to those found in certain other jurisdictions. Creditors exercise their rights individually by filing their claims and participating in the insolvency proceedings. Nevertheless, creditors collectively participate through the creditors\u2019 meeting (Gl\u00e4ubigerversammlung) and, where appointed, a creditors\u2019 committee (Gl\u00e4ubigerausschuss), which exercises the powers assigned to it under the Insolvency Act.<\/p>\n<p>The costs incurred by individual creditors in participating in the proceedings, including legal and advisory fees, are generally borne by the respective creditor and do not constitute insolvency claims.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What is the test for insolvency? Is there any obligation on directors or officers of the debtor to open insolvency proceedings upon the debtor becoming distressed or insolvent? Are there any consequences for failure to do so?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The statutory basic test is inability to pay debts as they fall due (Art. 8 IO). This exists where the debtor is unable, due to a lack of available funds, to pay due liabilities within the foreseeable future and is also unable to procure the necessary funds in due time.<\/p>\n<p>Legal entities and estates are also insolvent if they are overindebted. Overindebtedness within the meaning of insolvency law (Art. 9 IO) exists where (i) a positive going-concern prognosis can no longer be established and (ii) a balance sheet prepared on liquidation values shows a negative position. Mere balance-sheet overindebtedness is therefore not sufficient.<\/p>\n<p>If the requirements for opening insolvency proceedings are met, an application must be filed without culpable delay and, in any event, no later than 60 days after the occurrence of insolvency. This obligation applies to natural persons and, in the case of legal entities and estates, to the persons authorised to represent them. The application is not culpably delayed if the opening of restructuring proceedings with debtor-in-possession management has been pursued with due care. If insolvency results from a natural disaster, the 60-day period is extended to 120 days.<\/p>\n<p>For legal entities, Art. 182e PGR and Art. 182f of the Persons and Company Act (Personen- und Gesellschaftsrecht, hereafter &#8220;PGR&#8221;) must also be observed. Under these provisions, if there is justified concern that a legal entity is overindebted or unable to pay its debts, interim balance sheets must be prepared without delay, both on going-concern values and on liquidation values. At the same time, the management must convene a meeting of the supreme body and propose restructuring measures. If the interim balance sheets show that the legal entity is overindebted, or if it is unable to pay its debts, the management must notify the court. Notification may be omitted only if creditors issue subordination declarations or defer their claims, or if there is a concrete prospect that the overindebtedness or inability to pay will be remedied within two months from the preparation of the interim balance sheets or from the determination of inability to pay.<\/p>\n<p>A breach of these duties may give rise to civil liability and, in certain circumstances, criminal liability for impairment of creditors\u2019 interests.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What insolvency proceedings are available in the jurisdiction? Does management continue to operate the business and \/ or is the debtor subject to supervision? What roles do the court and other stakeholders play? How long does the process usually take to complete?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Liechtenstein insolvency law provides for the following proceedings: (i) restructuring proceedings with debtor-in-possession management, in which the debtor may continue operating the business; (ii) restructuring proceedings without debtor-in-possession management, in which continuation of the business is carried out by the insolvency administrator; and (iii) bankruptcy proceedings, in which the insolvency administrator realises the assets and distributes the insolvency estate among the creditors in accordance with the insolvency ranking.<\/p>\n<p>Continuation of the business by the debtor is therefore possible only in restructuring proceedings with debtor-in-possession management. The debtor is subject to supervision by an insolvency administrator.<\/p>\n<p>The duration of proceedings depends on the specific circumstances of the individual case. Large or complex proceedings may take several years.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What form of stay or moratorium applies in insolvency proceedings against the continuation of legal proceedings or the enforcement of creditors\u2019 claims? Does that stay or moratorium have extraterritorial effect? In what circumstances may creditors benefit from any exceptions to such stay or moratorium?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Legal proceedings aimed at asserting or securing claims against assets belonging to the insolvency estate may neither be commenced nor continued against the debtor after the opening of insolvency proceedings (Art. 19 para. 1 IO). Proceedings concerning rights to separate satisfaction and rights to segregation are excluded from this restriction (Art. 19 para. 2 IO). All pending legal proceedings in which the debtor is claimant or defendant and which concern assets belonging to the insolvency estate are interrupted by the opening of insolvency proceedings (Art. 20 para. 1 IO). In proceedings concerning claims that are subject to filing in the insolvency proceedings, the proceedings may not be resumed before completion of the claims examination hearing.<\/p>\n<p>Whether a stay of proceedings also applies abroad, or whether pending proceedings abroad are interrupted, is determined by the lex fori.<\/p>\n<p>Liechtenstein has entered into treaties on the recognition and enforcement of court decisions only with Austria and Switzerland. However, decisions in bankruptcy proceedings are expressly excluded from the scope of those treaties.<\/p>\n<p>Specific recognition regimes exist for certain regulated sectors, for example insurance undertakings with their seat in an EEA Contracting State. Pursuant to Art. 168 and Art. 176 VersAG, corresponding to Art. 274 and Art. 292 of Directive 2009\/138\/EC, Liechtenstein law determines the effects of the opening of insolvency proceedings on individual creditors\u2019 enforcement measures and pending proceedings.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How do the creditors, and more generally any affected parties, proceed in such proceedings? What are the requirements and forms governing the adoption of any reorganisation plan (if any)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Creditors primarily participate in these proceedings as filing and voting procedural parties. They may participate through a creditors\u2019 meeting and, where applicable, through a creditors\u2019 committee. They also have various rights to apply, participate and receive information.<\/p>\n<p>The adoption of a restructuring plan requires an admissible application by the debtor and, in restructuring proceedings with debtor-in-possession management, the submission of additional documents. Reference may be made to the answer to question 3.<\/p>\n<p>Adoption takes place at the restructuring plan hearing and requires both a headcount majority and a capital majority of the insolvency creditors present and entitled to vote. The plan then requires court confirmation. Formal requirements exist in particular with respect to submission of the plan, publication in the Official Gazette, special summons of the parties involved and personal signature of the list of assets.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How do creditors and other stakeholders rank on an insolvency of a debtor? Do any stakeholders enjoy particular priority (e.g. employees, pension liabilities, DIP financing)? Could the claims of any class of creditor be subordinated (e.g. recognition of subordination agreement)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Creditors are satisfied in a clear order of priority.<\/p>\n<p>Assets that are subject to rights of segregation (Aussonderungsrechte) do not form part of the insolvency estate and must be released to the person entitled thereto. Secured creditors holding rights to separate satisfaction (Absonderungsrechte) are entitled to preferential satisfaction from the proceeds of the encumbered assets, which constitute a separate estate. To the extent of their secured claims, they exclude the general insolvency creditors from sharing in those proceeds.<\/p>\n<p>Thereafter, estate claims are satisfied. These essentially include the costs of the insolvency proceedings and expenses connected with the preservation, administration and management of the insolvency estate, including employees\u2019 claims for ongoing remuneration for the period after the opening of insolvency proceedings.<\/p>\n<p>If estate claims cannot be satisfied in full, they are satisfied in a specific statutory order.<\/p>\n<p>The assets remaining after satisfaction of estate claims and preferential creditors form the common insolvency estate, from which insolvency claims are satisfied in proportion to their amounts.<\/p>\n<p>Subordination declarations are recognised. Such creditors may receive payment only after all other creditors have been satisfied.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can a debtor\u2019s pre-insolvency transactions be challenged? If so, by whom, when and on what grounds? What is the effect of a successful challenge and how are the rights of third parties impacted?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Legal acts carried out before the opening of insolvency proceedings and concerning the debtor\u2019s assets may be challenged under Art. 64 to 75 Legal Security Act (Rechtssicherungsordnung, hereafter &#8220;RSO&#8221;) and declared ineffective vis-\u00e0-vis the insolvency creditors. The right to challenge is generally exercised by the insolvency administrator (Art. 70 para. 1 IO). In restructuring proceedings with debtor-in-possession management, avoidance actions are also expressly reserved to the insolvency administrator (Art. 124 para. 1 lit. a IO).<\/p>\n<p>Gratuitous dispositions and equivalent transactions carried out within one year before the opening of insolvency proceedings are challengeable (Art. 65 RSO). Certain legal acts are also challengeable if the debtor carried them out within one year before the opening of insolvency proceedings and was already overindebted at the time (Art. 66 RSO). Finally, irrespective of the time at which they were carried out, all legal acts are challengeable if the debtor carried them out with the intention, recognisable to the other party at the time, of disadvantaging its creditors or favouring individual creditors to the detriment of others.<\/p>\n<p>A successful challenge renders the relevant act ineffective vis-\u00e0-vis the insolvency creditors, with the result that the withdrawn assets or their value must be returned to the estate or to the insolvency administrator for satisfaction of the creditors. The rights of third parties are limited in particular by the requirements of recognisability and by special rules protecting preferential creditors.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How are existing contracts treated in restructuring and insolvency processes? Are the parties obliged to continue to perform their obligations? Will termination, retention of title and set-off provisions in these contracts remain enforceable? Is there any ability for either party to disclaim the contract?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The effect on existing contracts depends on the type of contract. In the case of bilateral contracts that have not yet been performed or have not been fully performed, the insolvency administrator has a right of election under Art. 34 para. 1 IO: the administrator may either perform the contract in place of the debtor and demand performance from the other party, or withdraw from the contract.<\/p>\n<p>In the case of fixed-date transactions concerning goods with a market or exchange price, performance may no longer be demanded if the time for performance occurs only after the opening of insolvency proceedings; only damages for non-performance may be claimed.<\/p>\n<p>In the case of lease agreements, a distinction is made depending on whether the debtor is lessee or lessor. If the debtor has leased an asset, the insolvency administrator may terminate the agreement by observing the statutory notice period or a shorter agreed notice period. Any claim for damages by the contractual counterparty remains unaffected. If the debtor has leased out an asset, the insolvency administrator enters into the contract.<\/p>\n<p>In the case of employment contracts, the insolvency administrator exercises the debtor\u2019s rights and obligations as employer. Employment relationships that have already commenced may be terminated by the employee with immediate effect; the opening of insolvency proceedings constitutes good cause. The insolvency administrator may terminate employment contracts by observing the statutory or validly agreed notice period, but only in the cases set out in Art. 38 para. 1 lit. a and b IO, in particular if no business is operated or if the business or a part of the business had already been closed.<\/p>\n<p>A mandate granted by the debtor expires upon the opening of insolvency proceedings. Offers made to the debtor that have not yet been accepted generally remain in force unless a different intention of the offeror follows from the circumstances. The insolvency administrator is not bound by offers made by the debtor itself that have not yet been accepted.<\/p>\n<p>The parties may not rely on agreements excluding or restricting in advance the application of Art. 34 to 38 IO. An agreement providing for a right of withdrawal or termination in the event of the opening of insolvency proceedings is invalid. There are exceptions to this rule.<\/p>\n<p>If the business is continued, a stay on termination applies to the debtor\u2019s contractual counterparties. If termination of the contract could jeopardise continuation of the business, counterparties to contracts concluded with the debtor may, until the expiry of six months after the opening of insolvency proceedings, terminate such contracts only for good cause. A deterioration of the debtor\u2019s economic situation or the debtor\u2019s default in satisfying claims that became due before the opening of insolvency proceedings do not constitute good cause. Exceptions also apply to this rule (Art. 95 IO).<\/p>\n<p>A valid retention of title may give the seller a right to segregation of the relevant asset from the insolvency estate. Set-off is generally recognised, but subject to the specific limitations laid down in the Insolvency Act, in particular where the creditor acquired the claim against the debtor only after the opening of insolvency proceedings or in circumstances where the creditor knew or should have known of the debtor\u2019s insolvency.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What conditions apply to the sale of assets \/ the entire business in a restructuring or insolvency process? Does the purchaser acquire the assets \u201cfree and clear\u201d of claims and liabilities? Can security be released without creditor consent? Is credit bidding permitted? Are pre-packaged sales possible?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In bankruptcy proceedings and restructuring proceedings without debtor-in-possession management, the power to dispose of the assets forming part of the insolvency estate passes to the insolvency administrator. In restructuring proceedings with debtor-in-possession management, the debtor remains responsible for the administration of the insolvency estate, subject to the insolvency administrator&#8217;s right to object. In addition, material realisation measures, such as the sale of real estate, are reserved to the insolvency administrator. Such realisation also requires the debtor&#8217;s consent.<\/p>\n<p>The sale or lease of the business, or substantial parts thereof, as well as the sale of the entire inventory or substantial parts of it, requires the approval of both the creditors&#8217; committee and the Princely Court of Justice.<\/p>\n<p>Subject to limited rights in rem attached to the relevant asset, the purchaser acquires the asset free and clear of claims and liabilities. Assets subject to a preferential security right (Absonderungsrecht) may be realised without the secured creditor&#8217;s consent only in accordance with the provisions of the Enforcement Act (EO). Any other form of realisation requires the approval of the Princely Court of Justice and is permissible only if it is established that the secured creditor who withholds consent will be paid in full from the proceeds.<\/p>\n<p>Neither credit bidding nor pre-packaged sales are provided for under Liechtenstein law.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What duties and liabilities should directors and officers be mindful of when managing a distressed debtor? What are the consequences of breach of duty? Is there any scope for other parties (e.g. director, partner, shareholder, lender) to incur liability for the debts of an insolvent debtor and if so can they be covered by insurances?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Reference may be made to the answer to Question 7.<\/p>\n<p>Where there are justified concerns that a legal entity is overindebted or unable to pay its debts, the management must immediately prepare interim balance sheets on both a going-concern basis and a liquidation basis. At the same time, it must convene a meeting of the supreme corporate body and propose appropriate restructuring measures.<\/p>\n<p>If the requirements for the opening of insolvency proceedings are met, the management must file for insolvency without culpable delay and, in any event, within 60 days (or 120 days in the case of insolvency caused by a natural disaster).<\/p>\n<p>A breach of these duties may result in civil liability, primarily towards the debtor itself but, in certain circumstances, also towards the debtor&#8217;s creditors. It may furthermore give rise to criminal liability where creditors&#8217; interests have been prejudiced.<\/p>\n<p>Directors&#8217; and officers&#8217; liability insurance may be obtained.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Do restructuring or insolvency proceedings have the effect of releasing directors and other stakeholders from liability for previous actions and decisions? In which context could the liability of the directors be sought?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The opening of restructuring or insolvency proceedings does not release directors or other stakeholders from liability for previous acts or decisions.<\/p>\n<p>Where the company itself has suffered damage as a result of a breach of duty by its corporate bodies, it is the insolvency administrator who is responsible for pursuing the relevant liability claims.<\/p>\n<p>Where creditors suffer direct damage as a result of the breach of a duty owed to creditors, such as the failure to file for insolvency in due time, they may pursue individual claims for damages against the responsible directors even during pending insolvency proceedings. The only exception concerns the statutory stay applicable to quota damages (Quotensch\u00e4den) arising from delayed insolvency filings under Art. 6 para. 5 IO.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Will a local court recognise foreign restructuring or insolvency proceedings over a local debtor? What is the process and test for achieving such recognition? Does recognition depend on the COMI of the debtor and\/or the governing law of the debt to be compromised? Has the UNCITRAL Model Law on Cross Border Insolvency or the UNCITRAL Model Law on Recognition and Enforcement of Insolvency-Related Judgments been adopted or is it under consideration in your country?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>According to the settled case law, the effects of foreign insolvency proceedings, including the authority of a foreign insolvency administrator to conduct litigation and file appeals, are recognised only if reciprocity is observed by the foreign state concerned (F\u00fcrstlicher Oberster Gerichtshof, 02.09.2022, 05 KO.2021.317, GE 2022, 223).<\/p>\n<p>Likewise, the transfer of movable assets situated in Liechtenstein to a foreign insolvency administrator requires reciprocity. Such transfer is permissible only if no insolvency proceedings are opened in Liechtenstein. The opening of insolvency proceedings abroad does not prevent the opening of separate insolvency proceedings in Liechtenstein. Furthermore, the assets may be transferred only after any rights to segregation (Aussonderungsrechte) and rights to separate satisfaction (Absonderungsrechte) acquired before receipt of the request have been satisfied.<\/p>\n<p>Liechtenstein law does not base the recognition of foreign insolvency proceedings on a COMI test comparable to that under the UNCITRAL Model Law or the EU Insolvency Regulation. Instead, recognition primarily depends on the statutory requirement of reciprocity.<\/p>\n<p>Neither the UNCITRAL Model Law on Cross-Border Insolvency nor the UNCITRAL Model Law on Recognition and Enforcement of Insolvency-Related Judgments has been adopted in Liechtenstein, and there are currently no legislative initiatives to introduce either model law.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">For EU countries only: Have there been any challenges to the recognition of English proceedings in your jurisdiction following the Brexit implementation date? If yes, please provide details.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>N\/A<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can debtors incorporated elsewhere enter into restructuring or insolvency proceedings in the jurisdiction? What are the eligibility requirements? Are there any restrictions? Which country does your jurisdiction have the most cross-border problems with?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Insolvency proceedings may also be opened in Liechtenstein over foreign debtors, provided that the same statutory requirements applicable to domestic debtors are met and there is a sufficient connection to Liechtenstein.<\/p>\n<p>Parallel insolvency proceedings in Liechtenstein and abroad are therefore possible. Liechtenstein insolvency law is based on the principle of universality and, as a matter of principle, extends to the debtor&#8217;s assets located both within Liechtenstein and abroad. Pure territorial insolvency proceedings (Partikularinsolvenz) are unknown to Liechtenstein law.<\/p>\n<p>It is not possible to identify any particular foreign jurisdiction that gives rise to the greatest number of cross-border insolvency issues.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How are groups of companies treated on the restructuring or insolvency of one or more members of that group? Is there scope for cooperation between office holders? For EU countries only: Have there been any changes in the consideration granted to groups of companies following the transposition of Directive 2019\/1023?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Liechtenstein insolvency law does not provide for a specific group insolvency regime or a coordinated restructuring procedure for corporate groups.<\/p>\n<p>A separate framework exists only for banks and investment firms under the Recovery and Resolution Act (Sanierungs- und Abwicklungsgesetz, SAG).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is your country considering adoption of the UNCITRAL Model Law on Enterprise Group Insolvency?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There are currently no legislative initiatives to adopt the UNCITRAL Model Law on Enterprise Group Insolvency.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any proposed or upcoming changes to the restructuring \/ insolvency regime in your country?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Liechtenstein&#8217;s insolvency regime recently underwent a comprehensive reform.<\/p>\n<p>At present, no further legislative amendments are under consideration.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is your jurisdiction debtor or creditor friendly and was it always the case?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Liechtenstein has a balanced insolvency regime. The most recent reform significantly strengthened the restructuring framework while maintaining a strong focus on creditor protection. Accordingly, the system cannot readily be characterised as either debtor-friendly or creditor-friendly.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Do sociopolitical factors give additional influence to certain stakeholders in restructurings or insolvencies in the jurisdiction (e.g. pressure around employees or pensions)? What role does the State play in relation to a distressed business (e.g. availability of state support)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Sociopolitical factors do not generally afford particular stakeholders additional influence in restructuring or insolvency proceedings.<\/p>\n<p>The State does not assume any special role in relation to distressed businesses beyond its ordinary regulatory and judicial functions. In particular, there are no insolvency-specific state support mechanisms comparable to those available in certain other jurisdictions.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the greatest barriers to efficient and effective restructurings and insolvencies in the jurisdiction? Are there any proposals for reform to counter any such barriers?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The most recent insolvency reform has removed most of the structural obstacles that previously hindered successful restructurings.<\/p>\n<p>Today, the principal practical challenge to efficient and timely insolvency proceedings is their international dimension. In particular, difficulties may arise where assets are located abroad, as the recognition and effectiveness of Liechtenstein insolvency proceedings in foreign jurisdictions depend on the applicable rules governing the recognition of foreign insolvency proceedings.<\/p>\n<p>There are currently no legislative proposals addressing these issues.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n<div class=\"word-count-hidden\" style=\"display:none;\">Estimated word count: <span class=\"word-count\">5468<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n<script type=\"text\/javascript\" src=\"\/wp-content\/themes\/twentyseventeen\/src\/jquery\/components\/filter-guides.js\" async><\/script><\/div>"}},"_links":{"self":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/144762","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=144762"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}