Spotlight: recent restructuring and insolvency developments in Switzerland
All questions
Overview of restructuring and insolvency activities
The federal expert group expects Switzerland’s GDP to increase by 2.8 percent in 2022.2 In 2021, Switzerland’s GDP had grown by 3.7 percent, more than making up for the 2.9 percent loss in 2020 due to the Covid-19 pandemic. Until the outbreak of Covid-19, the Swiss labor market benefited from a favorable economic environment, with unemployment gradually falling since mid-2016. However, with the outbreak of Covid-19, unemployment rates started to rise, peaking at 3.7 percent in February 2021. In April 2022, the unemployment rate was 2.3 percent, having fallen significantly from the high levels of spring 2021. The expert group forecasts an average unemployment rate of 2.1 percent for this year.3
Due to a higher oil price and higher prices for goods affected by supply shortages, the Swiss National Bank (SNB) has revised its inflation forecast upwards and expects an inflation rate of 2.1 percent for 2022. The SNB forecasts inflation of 0.9 percent.4
In Switzerland, no official statistics on succession proceedings (ie formal reorganization proceedings) are published. Regarding bankruptcy proceedings, 14,081 bankruptcy proceedings were opened in 2021, an increase of 9 percent compared to 2020. The increase is due to the Covid-19 pandemic and the end of the Swiss government’s financial measures to support companies affected by Covid-19. Losses from bankruptcy proceedings fell to 4.2 billion Swiss francs in 2021, compared to 8.2 billion Swiss francs in 2020.5 It should be noted that the conclusion of a major case (Erb Group) in 2020 resulted in total damage of 6.5 billion Swiss francs.
Recent Legal Developments
Since its partial revision, which came into force on January 1, 2014, the DEBL has not undergone any significant changes. The 2014 revision was passed in response to the insolvency of Switzerland’s national airline, Swissair, which exposed the shortcomings of the Swiss recovery plan. Its primary objective was to encourage reorganization versus liquidation in probate through various changes discussed in previous editions of Merger control review.
Significant transactions, key developments and most active industries
There are no official statistics on distressed industries in Switzerland. A private study found that in 2021 most bankruptcies were opened through businesses in the craft and hospitality sectors. As far as we know, no new groundbreaking proceedings (bankruptcy or restructuring) have been opened in the last 12 months. Among the most prominent cases still ongoing are the Swissair insolvency proceedings (ie Flightlease AG, SAirLines AG and Swissair AG); the liquidation of the Petroplus Group, which operated oil refineries in several European countries (including the liquidation of its holding company, Petroplus Holding AG, and its principal operating company, Petroplus Marketing AG, both based in Zug); the bankruptcy proceedings of Banque Privée Espírito Santo SA companies; and the bankruptcy proceedings of the Swiss company Lehman Brothers.26