A mid-sized technology services company registered as an Aktiengesellschaft (AG – a Swiss joint-stock company) faced a liquidity crisis triggered by the simultaneous collapse of three key client contracts. Within weeks, the company had accumulated claims from a German equipment lessor, a French software licensor, and several domestic Swiss trade creditors. Each creditor group operated under a different legal expectation. Without a unified strategy, formal insolvency proceedings before the Bundesgericht (Federal Supreme Court of Switzerland) were a realistic prospect.
This matter illustrates how corporate restructuring in Switzerland requires early coordination across creditor classes under Swiss insolvency legislation and the Swiss Code of Obligations. The company avoided formal liquidation by implementing a court-supervised restructuring plan agreed with all creditor groups within approximately five months. The decisive factor was securing creditor support before the statutory deadline for filing a moratorium application.
This case study covers the client's background, the legal strategy selected, key milestones and complications encountered, and three transferable lessons for businesses facing comparable multi-creditor situations across jurisdictions.
Client profile and the challenge
The client was a technology services AG incorporated in a German-speaking Swiss canton. It had operated profitably for several years before contract terminations left it unable to service debts falling due within a 60-day window. The company's share capital had been partially eroded. Its directors faced personal exposure under Swiss corporate legislation if they delayed action once over-indebtedness became apparent.
The creditor profile was unusually fragmented. The German lessor held a perfected security interest over the company's primary server infrastructure. The French licensor held contractual termination rights over software licences that were essential to the business's ongoing operations. Domestic Swiss creditors – including a payroll services provider and two logistics firms – held unsecured claims. Each creditor had already issued formal demands. None had yet initiated enforcement proceedings, but that window was closing.
The core challenge was preserving the company's operational capacity while preventing any single creditor from accelerating enforcement. Under Swiss insolvency legislation, once a creditor obtains a definitive enforcement order, the path to formal bankruptcy proceedings shortens considerably. The directors needed a restructuring plan that all creditor classes would accept – and they needed it fast.
For context on comparable cross-border restructuring situations involving Swiss entities, our insolvency and restructuring services in Switzerland page sets out the full range of available instruments.
Legal strategy and key milestones
The strategy had three phases. The first phase focused on stabilisation – halting individual enforcement actions before any creditor obtained a priority position. Swiss insolvency legislation provides a moratorium mechanism that, once granted by the competent court, suspends most individual enforcement steps. Securing that moratorium quickly was the immediate priority.
The second phase involved a structured creditors meeting to present the proposed restructuring plan. Under Swiss insolvency legislation, a valid restructuring plan requires the approval of a qualified majority of creditors, measured both by number and by aggregate claim value. Coordinating creditors from three different jurisdictions – each with different expectations about proof of debt requirements and voting procedures – required careful preparation.
The third phase addressed the cross-border security interest. The German lessor's claim was the most technically complex. Its security over the server infrastructure had been granted under German law. The Swiss administrator appointed by the court had to assess whether that security was recognised and enforceable in Switzerland. This required analysis under both Swiss private international law and the relevant provisions of Swiss insolvency legislation governing foreign security interests.
Key milestones included:
- Week 1 – 2: internal financial assessment and engagement of the administrator to prepare moratorium documentation
- Week 3: moratorium application filed with the competent cantonal court; interim suspension of enforcement actions obtained
- Week 6: creditors meeting convened; proof of debt submissions received from all three creditor groups
- Week 10: draft restructuring plan circulated; creditor objections addressed through bilateral negotiations
- Month 5: restructuring plan confirmed by the court; the company remained in operation with revised payment schedules and amended licence terms
One complication arose mid-process. The French licensor initially refused to attend the creditors meeting, asserting that the Swiss proceedings had no effect on its contractual termination rights. This position required immediate legal engagement. Practitioners in Switzerland note that cross-border creditors frequently underestimate the reach of Swiss insolvency proceedings over contracts with a Swiss-based debtor. A targeted legal opinion presented to the licensor's counsel resolved the impasse within ten days.
To explore how corporate disputes arising during restructuring are handled in Switzerland, see our overview of corporate disputes services in Switzerland.
To receive a tailored assessment of your restructuring options in Switzerland, contact us at info@ferrazwhitmore.com.
Transferable lessons for cross-border restructuring matters
Lesson 1 – Act before enforcement, not after. Swiss insolvency legislation gives directors a duty to act promptly once over-indebtedness becomes apparent. The window between that point and formal bankruptcy proceedings is short. In this matter, the company's directors engaged insolvency counsel at the moment liquidity projections turned negative – before any creditor had obtained an enforcement order. That timing made the moratorium application credible. A delay of even four to six weeks could have allowed one creditor to secure priority, collapsing the possibility of a consensual restructuring plan.
Lesson 2 – Treat secured and unsecured creditors differently from day one. The German lessor's security interest over the server infrastructure gave it a materially different legal position from the unsecured domestic creditors. Conflating these classes – as companies sometimes do when preparing initial creditor communications – risks antagonising secured creditors who believe their position is being diluted. In this matter, the administrator's early recognition of the security interest, and the separate negotiation track maintained with the German lessor, was a key factor in keeping all parties engaged with the restructuring plan.
Lesson 3 – Cross-border creditors require jurisdiction-specific communication. The French licensor's initial refusal to engage was not bad faith – it reflected a genuine misunderstanding of how Swiss insolvency proceedings interact with French contractual rights. International businesses restructuring through Swiss proceedings regularly encounter this gap. A short, precisely targeted legal opinion explaining the reach of Swiss insolvency legislation resolved the issue far faster than prolonged correspondence. Engaging a law firm in Switzerland with genuine cross-border experience – one that can communicate the legal position in terms a foreign creditor's counsel will recognise – is not a luxury in these situations. It is a practical necessity.
For reference, a comparable restructuring matter involving a Portuguese-registered entity is discussed in our case study on corporate restructuring in Portugal, which illustrates how different civil law systems approach multi-creditor coordination.
To explore how these lessons apply to your business situation in Switzerland, schedule a consultation at info@ferrazwhitmore.com.
About Ferraz & Whitmore
Ferraz & Whitmore is an international law firm based in Lisbon, advising business clients across 46 jurisdictions. Our team combines Portuguese civil law expertise with English common law tradition to deliver cross-border legal solutions in corporate restructuring, insolvency proceedings, and multi-creditor debt management. We advise international entrepreneurs, institutional investors, and in-house legal teams operating across European and global markets. The firm's insolvency and restructuring practice covers matters before Swiss cantonal courts as well as restructuring proceedings in EU jurisdictions, supported by a network of local counsel. As a law firm in Switzerland and across Europe, we bring dual-tradition experience to matters where civil law and common law systems interact. including where German. French. Alternatively, English-law security interests must be assessed within Swiss insolvency proceedings. Engaging a lawyer in Switzerland with genuine cross-border capability makes a measurable difference when creditor classes span multiple jurisdictions. To discuss your restructuring situation in Switzerland, contact us at info@ferrazwhitmore.com.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.