Restructuring Over Liquidation

Daniel Hayek, Christina Meyer and Chantal Joris of Prager Dreifuss examine the revised Swiss insolvency law and its implications for debtors and creditors

The collapse in 2001 of Switzerland's national airline Swissair, until then regarded as a symbol of the country's reliability and efficiency, sparked a debate over the need to amend Swiss insolvency laws. Criticism was raised that the Swiss Debt Enforcement and Bankruptcy Law (DEBL) had proven ineffective in facilitating the restructuring of companies in distress and was not adequate to deal with the insolvencies of large groups of companies. After years of controversies and negotiations in the Swiss parliament, the revised DEBL finally entered into force on January 1 2014. According to the relevant transitional provision, the revised law applies to composition proceedings filed after January 1 2014; composition proceedings initiated before 2014 (such as the large Swiss bankruptcies of Swissair group companies