Rights of the creditor against the co-obligated persons of the debtor under a composition: new Decision of the Swiss Federal Tribunal

The Court’s approval of a composition agreement does not deprive the composition creditor to sue the joint debtors and other guarantors of the debtor, despite the approval of the proposed composition. In certain cases, they can escape their obligations toward the creditor. In a recent and innovative decision, the Swiss Federal Tribunal restates the acts that must be carried out by the creditor, whose claim is subject to a personal guarantee in order to preserve his rights against the joint debtors. Furthermore, this decision allows a new alternative to the actual legal possibilities (information to the co-obligated persons and offer to cede the creditor’s rights – Art. 303 para. 2 LP – and authorisation for the co-obligated persons to decide in his stead whether to ratify the composition agreement – Art. 303 para. 3 LP).