April 2020

On April 16, 2020, the Swiss Federal Council enacted the COVID-19 Insolvency Ordinance. One of its main goals is to relieve pressure on executive bodies of Swiss entities to request the opening of insolvency proceedings. Relief is targeted at over-indebtedness situations caused by negative impacts of the COVID-19 pandemic on liquidity, earnings and going-concern prospects. Further, the Swiss Federal Council put in place a special COVID-19 moratorium. This 'moratorium-lite' will facilitate SMEs' fast access to a protective moratorium with less formal requirements than would otherwise apply under the general composition moratorium. The 'moratorium-lite' replaces the general suspension of debt enforcement proceedings ordered by the Swiss Federal Council earlier in the COVID-19 crisis, which will expire on April 19, 2020.