Creditor (Trade Claim)
Creditors’ Information Rights
To the extent a company does not already publish its accounts as a result of being publicly listed, creditors that can show a justifiable interest can also request to review the annual report of a company.
Once bankruptcy proceedings have been initiated, creditors also have the right to inspect the bankruptcy files (which include the debtor’s files seized by the bankruptcy office).
Finally, the insolvency administrator has reporting obligations to the creditors, which inter alia include providing a comprehensive report on the financial situation of the debtor on the occasion of the creditors’ meeting and a report to the court as to the approval of the proposed composition agreement. Generally, there will also be interim update reports.
How to Enforce a Claim?
A simple statement of the creditor to the debt collection office at the debtor’s domicile or at the debtor’s registered office is sufficient to commence the enforcement proceedings of a money claim. Upon receipt of the enforcement request, the enforcement office issues the summons to pay. The debtor can file an objection within 10 days of notification without giving any reasons. This forces the creditor to set aside the objection and, depending on the evidence at hand on the claim, to:
- institute an ordinary legal action (in the event of liquid cases in a summary proceeding) to prove the claim;
- request in a summary proceeding the enforcement of an enforceable judgement rendered by a Swiss court, or an equivalent order of a recognised foreign court (including an arbitral award), in which case the court will definitively set aside the objection; or
- reach a provisional setting aside of the objection if the claim is evidenced by a written debt acknowledgement duly signed by the debtor.
Where the creditor’s claim is secured by collateral, the creditor can then proceed and request that the debt enforcement office proceed with enforcing the collateral or the creditor can request ordinary debt enforcement proceedings. In the case of companies or other parties registered in the commercial registry the latter would ultimately lead to the debtor being declared bankrupt.
As soon as a debtor has been declared bankrupt, there will be a notification in the Swiss Official Gazette of Commerce setting a deadline to file claims. To enforce a claim the creditor can file a claim in the bankruptcy proceeding by stating the claim amount, the basis for the claim and the security it has (if any) or which class of claim it considers to fall under.
Risk of Clawback
A creditor risks a clawback action if it has concluded transactions with the debtor in the past five years prior to the opening of bankruptcy proceedings that are knowingly disadvantageous to creditors in general, or for the benefit of individual creditors (fraudulent conveyance).
The creditor also risks a clawback action if in the year prior to the bankruptcy of the debtor it has entered into transactions such as requiring a security for an unsecured debt without prior respective obligations, requiring satisfaction of a money claim other than by usual methods of payment, and seeking payment of claims that are not yet due, while the debtor was indebted. The transaction will not be set aside if the beneficiary can demonstrate that it neither knew nor ought to have known that the debtor was over-indebted. Read more here.