In the period from 1 July 2013 to 1 January 2014, the following significant changes have become effective from the perspective of Swiss business law:
- Federal Act on Debt Collection and Bankruptcy: onus of proof in cases of contested donations and contested intention, composition proceedings
A contestation of disposals of assets aims to return assets to debt enforcement which were removed from it by a transaction on the part of the debtor. If a debtor reduces his assets at the creditors’ expense by means of gifts within the last year before the declaration of bankruptcy, such transactions can be contested with a contestation of donation. Transactions for and without valuable consideration which diminish the creditors’ liability coverage and are conducted with the intention of placing creditors at a disadvantage are contestable in so far as the third-party beneficiary was able to perceive the debtor’s actual malice, which was acted upon within the last five years prior to seizure or declaration of bankruptcy.
When it comes to contesting a donation or an intention in connection with bestowals to an associated person, which may be an affiliated company, the distribution of the onus of proof has changed. When a legal transaction that is equivalent to a donation is contested, the associated person will have to prove that there is no disproportion between the gift and the consideration. When it comes to contesting an intention, proof of the lacking perceptibility of actual malice must be provided by the associated person who has received the bestowal. An actio pauliana against a legal transaction is thus facilitated if the assets are transferred to the benefit of an associated person. Furthermore, the two-year period pursuant to Art. 292 of the Debt Collection and Bankruptcy Act is now a statute-of-limitation period and no longer a forfeiture period. This means that this period can be interrupted and then restarted. This, too, makes a successful contestation easier.
Various changes have also been made to composition proceedings. Thus a debt restructuring moratorium need no longer lead to a composition agreement or to bankruptcy but can now also be approved exclusively for the purpose of reorganisation. In the context of a regular composition agreement, all shareholders have to make an appropriate contribution to the reorganisation, which was not the case before. When an enterprise is taken over in an insolvency proceeding, there is no longer any obligation to continue all existing employment contracts.
- Code of obligations: redundancy package
There is now a general obligation to provide a redundancy package for enterprises with more than 250 employees if more than 30 employees are to be made redundant. No redundancy package need be offered in cases of mass redundancies during bankruptcy or composition proceedings which are concluded by means of a composition agreement.
- Federal Act on Collective Investment Schemes
Regulations concerning the distribution of collective investment schemes are being tightened up. Thus the authorised institutions and any third parties involved in distribution must put down in writing their customers’ requirements as ascertained by them and their reasons for recommending a purchase. These records must be handed over to the customers. Whereas before, the distribution of foreign collective investment schemes was not subject to any regulation, a Swiss representative and a Swiss paying agent now have to be nominated for such schemes. The fact that the redefinition of the quali-fied investor coincided with the introduction of the rather opaque transitional provisions makes the new regulations concerning foreign collective investment schemes decidedly complex. As before, the distribution of such investment schemes requires product clearance by FINMA.
- Ordinance against Excessive Compensation in Listed Joint-Stock Companies
The fact that the so-called Minder or “Fat-Cat” initiative was carried in March 2013 and was already mentioned in the last Client Letter. Meanwhile, this initiative has been implemented with the above-mentioned ordinance, which came into force on 1 January 2014. In particular, the ordinance regulates the compensation system at top-management level and institutional voting by proxy, and it calls for the issuance of corresponding provisions in companies’ articles of association. This concerns joint-stock companies which are based in Switzerland and whose shares are listed on a stock exchange at home or abroad. Two provisions are also aimed at pension schemes, on which a certain obligation to vote has been imposed. In short, the board of directors has to draw up a compensation report, while the annual general meeting has to cast a binding vote on all compensation paid to the board of directors, the executive board and, where applicable, the advisory board. Companies may opt for prospective or retrospective approval. Certain forms of compensation, such as severance pay or advance compensation, are no longer permitted under threat of punishment. The outlines of the compensation systems must be described in the articles of association. With regard to the organisation of companies, the ordinance makes the individual election of the members of the board of directors, the chairman of the board of directors and the members of the compensation committee by the annual general meeting compulsory.
For questions please contact
Sandra De Vito Bieri, [email protected] or
Florian S. Jörg, [email protected]
Bratschi Wiederkehr & Buob, Zurich