Standing of a Swiss ancillary bankruptcy estate to contest a schedule of claims
A recent decision of the Swiss Federal Supreme Court clarified the question whether a Swiss ancillary bankruptcy estate has standing to contest a schedule of claims of a bankrupt Swiss third-party debtor if the foreign bankruptcy estate filed the respective claims directly and regardless of the recognition of the foreign bankruptcy decree. In essence, the Swiss Federal Supreme Court denied the standing of the ancillary bankruptcy estate as it may in such cases not be considered a creditor of the respective claims. The decision underlines the importance of having a foreign bankruptcy decree recognized before rights are asserted in Switzerland.
Foreign bankruptcy decrees must be recognized
Foreign liquidators must apply for a recognition of a foreign bankruptcy decree in accordance with the principle of territoriality before they can act in Switzerland (cf. our post dated 22 June 2020). The recognition serves as a form of legal assistance in favor of the foreign bankruptcy proceedings. If the foreign bankruptcy decree is recognized, the debtor’s assets located in Switzerland are subject to the Swiss bankruptcy law and usually so-called ancillary bankruptcy proceedings (Hilfskonkursverfahren) are opened.
Foreign liquidators may not act in Switzerland
The foreign liquidator is entitled to apply for recognition but, in general, does not have the power to perform acts in Switzerland in relation to debt collection. It is neither entitled to file claims nor to contest a schedule of claims of a bankrupt Swiss third-party debtor. In principle, only the (Swiss) ancillary bankruptcy estate may assert claims and exercise rights. Under certain limited circumstances the court may abstain from opening ancillary bankruptcy proceedings and authorize the foreign liquidator to act directly on Swiss soil. Such an authorization has however not been granted in the case at hand.
In the present case, the foreign liquidator filed claims in the bankruptcy of a third-party debtor both before and after the foreign decree was recognized. The liquidator of the third-party debtor assessed the claims but rejected them. The ancillary bankruptcy estate subsequently challenged the non-admission of the claims filed by the foreign liquidator in court.
Ancillary bankruptcy estate lacks standing to contest a schedule of claims
In principle only (alleged) creditors who have filed a claim with a bankruptcy estate are entitled to contest the schedule of claims (e.g. if its claim is dismissed). In its decision, the Swiss Federal Supreme Court insisted on the formal “creditor requirement” and ruled that the ancillary bankruptcy estate lacked standing to contest the schedule of claims of the Swiss third-party debtor as the foreign bankruptcy estate and not the ancillary bankruptcy estate had filed the respective claims.
According to the Swiss Federal Supreme Court it is irrelevant whether the claims have been filed by the foreign liquidator before or after the foreign bankruptcy decree has been recognized in Switzerland. As the recognition has no retroactive effect, it does not affect the (in)validity of claims filed by the foreign bankruptcy estate before recognition. They remain inadmissible acts of a foreign liquidator. Claims filed by the foreign bankruptcy estate after recognition of the foreign bankruptcy decree are inadmissible since domestic claims must be asserted exclusively by the ancillary bankruptcy estate.
Get it right
Although one may deem the decision of the Swiss Federal Supreme Court to be (overly) formalistic, it sets the standards to be adhered to. In light of the above, it appears paramount for foreign liquidators to follow the formal requirements of Swiss law in order to get a hand on assets located in Switzerland. The Swiss Litigation and Risk Management practice group of Loyens & Loeff frequently advises clients in relation to recognition proceedings and will be pleased to answer all queries you may have.
Robin MoserLocal partner Attorney at law
Robin Moser, attorney at law, is a local partner in our Zurich office. He focuses on domestic and international dispute resolution and has broad experience in representing clients in court, before federal and cantonal authorities and arbitral tribunals.T: +41434346700 E: [email protected]