Coronavirus: measures against impending wave of bankruptcies
The Federal Council wants to take measures to protect Swiss companies from corona-related bankruptcy. The Federal Department of Justice and Police (FDJP) will submit corresponding proposals after Easter. At the same time, the Federal Council has decided not to extend the legal standstill in the debt collection system and the court vacations.
The Federal Council does not extend the debt collection standstill and the court vacations in civil and administrative proceedings. They will end as planned at midnight on April 19, 2020. The standstill of time limits in the debt collection system is not a suitable instrument in the long term to counter the current economic difficulties. Instead, the Federal Council is considering measures to prevent corona-related bankruptcies as specifically as possible.
It is true that the Federal Council has already taken substantial cushioning measures to protect the economy, especially to bridge liquidity bottlenecks. Nevertheless, numerous companies are threatened with over-indebtedness and thus bankruptcy due to the Corona pandemic. At its meeting on April 8, 2020, the Federal Council therefore instructed the FDJP to propose suitable instruments in the law on capital protection (CO) and in the law on reorganization and deferment (SchKG) to protect Switzerland from unnecessary bankruptcies. A wave of bankruptcies would have severe consequences for the national economy and especially for jobs.
Bankruptcy deferral and temporary COVID-19 deferral.
On behalf of the Federal Council, the FDJP is specifically examining a temporary regulation whereby companies can wait to file for bankruptcy in the event of imminent, corona-related over-indebtedness if there is a prospect that over-indebtedness can be remedied after the crisis. Today, the board of directors is obliged to take this step pursuant to Art. 725 para. 2 of the Swiss Code of Obligations (CO).
Furthermore, the Federal Council wants to tailor the law on estates pursuant to Art. 293 et seq. of the Federal Debt Collection and Bankruptcy Act (SchKG) to the needs in the current situation with minor amendments. For small and medium-sized companies that are in financial distress solely due to the Corona pandemic, he also wants to introduce a temporary deferral, the so-called Covid-19 deferral. These measures are intended to give companies time to reorganize their business and implement recovery measures.
On the other hand, the Federal Council notes that the emergency deferral already provided for in the law to protect endangered companies in the current crisis is not a suitable instrument (cf. Art. 337 et seq. SchKG). Any requests from the cantons would therefore be rejected.
The Federal Office of Justice (FOJ) conducted a public consultation on these proposals from April 1 to April 3, 2020. Approximately 100 comments were received, the majority of which support the thrust of the proposals.
Courts should be allowed to use new technologies
In the area of civil proceedings, the FDJP is examining temporary special regulations in procedural law to relieve the courts. Specifically, the courts have suggested allowing the use of video or telephone conferences in civil proceedings, as is already possible in administrative proceedings. A corresponding regulation would eliminate existing uncertainties in this regard and support the Federal Council's goal of maintaining the operation of the judiciary.
Press release Federal Government (9.4.2020)
Measures
Reply on 4/16/2020: In response to the above announcement of 4/9/2020, the Federal Council has decided the following: The ordinance provides for temporary relief from the obligation to report over-indebtedness, which would normally lead to immediate bankruptcy, as well as the possibility of a temporary, non-bureaucratic COVID 19 deferral, especially for SMEs.
