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Swiss amend bankruptcy laws to protect firms hit by coronavirus crisis

Reuters | Zurich | Updated: 09-04-2020 13:08 IST | Created: 09-04-2020 12:04 IST
Swiss amend bankruptcy laws to protect firms hit by coronavirus crisis
Representative Image Image Credit : Wikimedia

The Swiss government will look at temporarily changing its bankruptcy laws to protect companies hit by cash-flow problems and mounting debts during the coronavirus crisis, it said on Thursday. Companies would be able to wait to file for insolvency if they are threatened with coronavirus-related problems, provided there is a chance their debt problems can be resolved after the crisis, the Justice Ministry said, according to the proposal it is considering.

Despite launching a 62 billion Swiss franc ($63.85 billion)aid package to support the Swiss economy, "the coronavirus pandemic threatens many companies with over-indebtedness and therefore bankruptcy," the government said. "A wave of bankruptcies would have serious consequences for the economy, in particular for jobs," it said. The government warned on Wednesday the Swiss economy could shrink by up to 10.4% this year due to the epidemic.

The Swiss government also said that a halt on debt collections and a so-called court holiday in which cases were put on hold would end on April 19. "The deadline freeze in debt collection is not an appropriate instrument to counter the current economic difficulties," it said in a statement. "Rather, the government is eyeing targeted measures in which to halt a coronavirus-related bankruptcy."

The Justice Ministry will also look at using telephone and video conferences in civil proceedings to maintain the operation of the justice system, it said. ($1 = 0.9710 Swiss francs)



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