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36
Legal Expert Board
OCTOBER 2013
Insolvency and Restructuring Switzerland
Continuing with our focus on the issues surrounding insolvency and
restructuring, Lawyer Monthly speaks to Daniel Hayek, a member of the management committee of Prager Dreifuss Ltd. Prager Dreifuss is an integrated law firm in Switzerland with a strong international focus, some 40 lawyers, and offices in Zurich, Berne and Brussels.
Please introduce yourself, your role and your firm.
As the head of Prager Dreifuss' "Corporate and M&A" team I am specialized in mergers and acquisitions (mainly strategic buyers), corporate finance, banking, restructuring and bankruptcy proceedings as well as general corporate matters. My team and I advise business clients in all types of domestic and cross-border
transactions and we
represent creditors, some of which are banks, hedge funds or other financial institutions, in insolvency and restructuring proceedings.
long standing working relationships with leading counsels in all major jurisdictions.
the restructuring and insolvency market has evolved radically over the last few years. How have you seen the market change recently in your jurisdiction?
In these fields I also
represent clients in court and before arbitrational tribunals.
Our firm is committed to understand the client‘s business and our services are individually tailored to and focused on our client‘s needs. Our many years of experience enable us to cut through complexity and select the right strategy for our clients. We have a lean and efficient structure, strong and diverse teams specialised in all major areas of commercial law, active ties to authorities, Swiss universities and academia and
Switzerland was shaken by the insolvency of its national airline Swissair in 2001, which led to the largest insolvency proceedings in Swiss history. Consequently, litigation concerning aircraft lease agreements became a major issue. Recently, due to the financial crisis banks and financial institutions find themselves in the public eye. Numerous syndicated loans and over-the-counter derivatives contracts lapsed due to early termination provisions because of the insolvency of their counterparty or parent companies that originally provided guarantees to their affiliates. As a consequence of the meltdown in 2008, bankruptcy litigation in Switzerland became more finance- based. A notable trend throughout most recent bankruptcy proceedings is the increased use of preference claims by bankruptcy administrators. Considerable amounts that debtors paid out shortly
before they became bankrupt have successfully been claimed back by bankruptcy administrators by means of clawback actions. The various directors' liabilities claims that also have been initiated by the bankruptcy administrators have enjoyed lesser degrees of success.
What do you think are the advantages and disadvantages of a restructuring programme as opposed to insolvency?
In both proceedings, be it a restructuring or an insolvency, creditors are faced with the threat that they have to renounce a certain part of their claim. However, a characteristic difference is that within a private restructuring programme all creditors, and not only the majority like for example within a debt restructuring moratorium, must agree on such proceedings. Once consent regarding the private restructuring is reached, a further advantage is that the parties can proceed faster and do not need to adhere to directions imposed by a bankruptcy administrator but only to the conditions they negotiated. A board of directors must be aware though, that in order to avoid directors' liability claims