Restructuring & Turnaround in Switzerland: Expert Insights

At Valtus Alliance, restructuring is always approached with a clear understanding that each country operates under its own legal framework and market dynamics.

In this interview, Andreas Greis (Partner, Valtus Germany) speaks with Roland Kleeb (Partner, FS Partners AG, Zurich) about restructuring in Switzerland — a system shaped less by formal procedures and more by creditor autonomy, negotiation, and pragmatic execution.

A System Built on Pragmatism and Early Action

Andreas:

What makes the Swiss restructuring framework unique?

Roland:

The Swiss system is characterised by a strong focus on practicality and early intervention. It allows for flexible solutions and encourages out-of-court restructuring before irreversible damage occurs.

One of its strengths is legal clarity combined with pragmatism. However, this also places responsibility on management. Decision-making must be carefully documented, including the assumptions, analysis, and reasoning behind each step.

An area that is often underestimated is the disclosure of conflicts of interest. This applies not only to family-owned businesses but more broadly across governance structures.

Recent legal developments, particularly the Federal Act on Combating Abusive Bankruptcy, have also strengthened the framework. Since 2025, companies may face debt enforcement proceedings even for public law claims such as taxes, which increases pressure on management to act early and transparently.

Consensus Over Procedure

Andreas:

How does Switzerland differ from other European systems?

Roland:

The key difference is that restructuring in Switzerland is primarily driven by consensus rather than formal procedure.

There is no preventive restructuring framework with majority voting or statutory cram-down mechanisms, as seen in the EU or Germany. Instead, outcomes depend on negotiation between stakeholders.

This makes restructuring less about legal processes and more about the ability of parties to reach agreement. In that sense, consensus is not just a cultural feature — it is embedded in the legal structure.

Creditor Autonomy and Limited Court Involvement

A second defining feature is the limited role of the courts.

Swiss law provides for formal tools such as a debt moratorium, but judicial intervention remains deliberately restricted. Courts supervise and confirm processes, but they do not actively structure creditor classes or manage negotiations.

This creates a system with a high degree of creditor autonomy. At the same time, it increases reliance on the negotiating capability of those involved.

When out-of-court solutions are no longer sufficient, the debt moratorium becomes the primary formal mechanism.

Banks as Central Stakeholders

Another important distinction is the role of banks.

In Switzerland, financing banks often become the central coordinating force in restructuring situations. While legally they remain creditors, in practice they take on a much broader role.

Instead of relying on formal processes, restructuring is frequently managed through:

subordination agreements
bridge financing
standstill arrangements

Compared to other European systems, where distressed investors or formal procedures play a larger role, the Swiss model remains more relationship-driven.

Speed, Liquidity, and Discretion

Swiss restructuring is also defined by its speed and discretion.

Formal procedures carry less stigma than in some countries, but they are still rarely used as early-stage tools. Instead, they are typically implemented once solutions have already been negotiated.

The approach is strongly liquidity-focused. Success depends less on legal eligibility and more on the structure of creditors and the company’s ability to maintain control over cash.

Mandatory Actions in Crisis Situations

Andreas:

Are there formal obligations when a crisis emerges?

Roland:

Yes. Once there is a risk of capital loss or over-indebtedness, management must take concrete steps.

This may include audited interim financial statements and the development of a restructuring plan. These requirements are designed to create transparency and enforce discipline within the organisation.

The Most Common Early-Stage Mistake

Andreas:

What do companies typically get wrong?

Roland:

Waiting too long is the most common mistake.

Another frequent issue is focusing too quickly on financing solutions instead of first conducting a proper analysis. Companies often underestimate external pressures, operational weaknesses, or market shifts, and assume the situation will stabilise.

In reality, liquidity crises rarely develop in a predictable or linear way. By the time action is taken, resources are often consumed by short-term cash management rather than strategic problem-solving.

When to Bring in External Expertise

Andreas:

When should external restructuring experts be involved?

Roland:

In complex situations, as early as possible — ideally before the crisis fully materialises.

External experts may act as CROs or independent advisors, but the mandate should come from the board to ensure clear governance and authority.

Depending on the situation, additional technical specialists may also be required early on.

Leadership Under Pressure: The “Perfect Storm” Case

Andreas:

Which experience has shaped your perspective the most?

Roland:

One case involved a group of companies facing a “perfect storm” of challenges.

There was intense competitive pressure from new products and changing customer behaviour, combined with margin erosion caused by currency effects and cheaper foreign competitors. At the same time, key orders were lost.

This required rapid decision-making while balancing the interests of multiple stakeholders — employees, creditors, shareholders, customers, and suppliers.

Situations like this highlight the importance of strong leadership, experience, and consistent communication.

Restructuring as a Coordinated Effort

Andreas:

What does your restructuring network look like?

Roland:

Restructuring is always a team effort.

We work closely with legal experts, banks, tax advisors, valuation specialists, and, depending on the situation, industry-specific experts. In cases with public visibility, communication specialists are also involved.

The complexity of modern restructuring requires coordinated expertise across multiple disciplines.

Efficient but Relationship-Driven Cooperation

Andreas:

How effective is cooperation between stakeholders?

Roland:

In Switzerland, cooperation is generally efficient.

When preparation is thorough and communication is transparent, management, creditors, and courts tend to act pragmatically and focus on solutions.

This willingness to compromise is one of the strengths of the system.

Advice for Foreign Companies

Andreas:

What should foreign companies with Swiss subsidiaries do in crisis?

Roland:

Start with a local analysis.

Key priorities include:

understanding liability risks
identifying conflicts of interest
clarifying ownership of assets and rights

Liquidity must be secured quickly to create time for proper assessment and action.

Equally important is structured communication across stakeholders, especially in cross-border contexts where cultural differences can influence decision-making.