04.03.2014 – On 1 January 2014, the newly amended Swiss Debt Enforcement and Bankruptcy Act came into force. Among other things, the new law provides that a distressed M&A deal that was approved by the composition judge or by the creditors' committee during a composition moratorium (Nachlassstundung; sursis concordataire) may no longer be challenged by way of a fraudulent conveyance claim. In the past, the risk that a creditor would bring such a "claw-back action" was a big concern for interested acquirers and often a stumbling block in the efforts to save a distressed company.
With this additional legal certainty, it is now safer to do distressed M&A deals in Switzerland before bankruptcy. Despite the recovery in the global economy and the remarkable perseverance of the Swiss economy, we expect the number and size of this type of transactions to increase.