Restructuring Options In Switzerland: Pre-Packs

Pre-packs, known as an effective restructuring measure from other jurisdictions, are also permissible in Switzerland.

What is a pre-pack?

A "pre-pack" is commonly understood as a negotiated sale of all or a substantial part of the debtor's business to an investor or a rescue company which has been prepared by the debtor independently and prior to the filing for insolvency proceedings, yet is executed only with the approval of the court immediately upon or shortly after the opening of insolvency proceedings. The sale is aimed at saving the debtor's ongoing business. Unlike in bankruptcy proceedings, a pre-pack allows the debtor's business operations to continue, so that business partners and key employees are retained and the company's reputation is preserved. Therefore, pre-packs are an effective way to successfully restructure a company which combines the advantages of both the private and judicial reorganization.