Vol 16 (2019) - Issue 1

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Switzerland – New International Insolvency Law

Synopsis

On 1 January 2019, a revision of the Swiss international insolvency law came into effect. The amendments concern the eleventh chapter on bankruptcy and restructuring of the Federal Act on Private International Law ('PILA') and are expected to significantly simplify the recognition of foreign bankruptcy and composition decrees in Switzerland. First and most importantly, the new rules facilitate the recognition of foreign bankruptcy and composition decrees in Switzerland by explicitly acknowledging the 'COMI' approach and abolishing the former requirement of reciprocity. In addition, the new law provides for a long awaited coordination between branch bankruptcy proceedings and so-called 'secondary bankruptcy proceedings' that are opened in case of recognition of foreign proceedings in Switzerland. Finally, the revised law gives the foreign insolvency administrator the right, under certain conditions, to request dispensation of secondary bankruptcy proceedings, thereby enabling the foreign insolvency official to directly collect assets in Switzerland and, thus, accelerating the transfer of such assets to the foreign bankruptcy estate.