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Media Release
Surge in Swiss Debt Restructuring Moratoriums in 2023
Switzerland shows upward trend in corporate bankruptcies Number of Swiss debt restructuring moratoriums in 2023 increased by 59% compared to 2022 with the number of cases increasing from 59 to 94 Use as a restructuring tool remains overall low in Switzerland by international standards
Zurich, 23 January 2025 – The annual study released by global professional services firm (A&M) reveals a substantial increase in the use of debt restructuring moratoriums in Switzerland during 2023. The procedure is a legal instrument that financially distressed companies can use to implement financial and operational restructuring efforts, to obtain protection from their creditors, and to gain time to restructure and reorganise. In contrast to bankruptcy, it allows businesses or parts of businesses to preserve assets and jobs. In Switzerland, the trend in corporate bankruptcies is rising. In 2023, a total of 4,493 corporate bankruptcies were recorded and they further increased in 2024. According to the study, 94 moratorium procedures were initiated. Approximately 53% of the procedures in 2023 remained non-public, reflecting continued preference for confidentiality among companies. The so-called 'silent' procedures accounted on average for 65% of total proceedings since 2019. In 2023, the number of debt moratorium procedures reached the highest level within the five-year analysis period, and in line with corporate bankruptcies a further increase is expected for 2024. However, with 2.1% in 2023 the use of a debt restructuring moratorium remains low in Switzerland by international standards where similar instruments are used much more frequently (US: 33%; Austria: 7%; UK: 6%; Germany: 1.5% in 2022). In addition, the study found that the outcomes of business turnarounds have improved, with 42% of 2023 procedures resulting in business continuity, demonstrating the resilience of businesses despite adverse economic pressures. Success rates for 2023 cases are expected to increase over time, as successful turnarounds generally take longer to achieve. The report also underscores the effect of the revised company law enacted in January 2023, which mandates boards to take decisive actions during financial distress. Alessandro Farsaci, Managing Director at Alvarez & Marsal Switzerland, comments: "The number of cases remain relatively low but we observe an increasing trend in the use of the instrument driven by a combination of economic context, increasing numbers of distressed companies, and prominent recently announced restructuring cases, showing that the instrument can be used effectively. Changes in the law appear to have prompted a proactive approach, with debt moratoriums emerging as a viable alternative to bankruptcy. For 2024 and 2025 we expect a further increase in the number of cases." As companies continue to face global economic headwinds and geopolitical conflicts, demand for restructuring solutions is expected to remain elevated in the coming year. The advantages of the debt restructuring procedure include, for example, suspension or protection from debt collection and legal proceedings, no seizure of the debtor's assets, or the possibility of terminating long-term contracts if these stand in the way of successful restructuring. Tobias Fritsche, Director at Alvarez & Marsal Switzerland, says: "The revised Companies Act, which came into force on 1 January 2008, has brought the duties of the board of directors in the event of a corporate crisis into sharper focus. Although the early warning system has not been significantly improved, the new provision that the application for a debt restructuring moratorium fulfils the board's legal obligations may lead to an increase in such proceedings.” - -
Notes to the editors Methodology The study's data collection is based on official publications in the Schweizerischen Handelsamtsblatt (SHAB) and is limited to corporations and limited liability companies. For the analysis of non-published debt restructuring moratorium proceedings, the authors collected data directly from the official Swiss bankruptcy courts. Of the 110 courts surveyed, 80% responded. The high response rate allows for robust conclusions to be drawn from the data. In addition, the data were discussed with the majority of the administrators active during the period under review. The allocation of rescheduling cases to a specific year was determined based on the date the provisional rescheduling was granted (e.g., if the provisional rescheduling was granted in 2020 and converted to a definitive rescheduling in 2022, the case is only counted in the 2020 period). Founded in 1983, Alvarez & Marsal is a leading global professional services firm. Renowned for its leadership, action and results, Alvarez & Marsal provides advisory, business performance improvement and turnaround management services, delivering practical solutions to address clients' unique challenges. With a world-wide network of experienced operators, world-class consultants, former regulators and industry authorities, Alvarez & Marsal helps corporates, boards, private equity firms, law firms and government agencies drive transformation, mitigate risk and unlock value at every stage of growth. To learn more, visit: alvarezandmarsal.com Nicolas Weidmann Alessandro Farsaci
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2072805 23.01.2025 CET/CEST
