The Supreme Court recently delivered a decision regarding title retention of IP rights, ruling that a buyer of an IP right receives protection towards the seller's creditors through the agreement and that there is no need for a separate perfection measure. Therefore, by analogy, there is no need for a perfection measure in order to uphold a contractually valid termination given before the buyer entered into bankruptcy.
If a buyer of chattels wishes to receive protection against the seller's creditors, Swedish law demands, in most cases, that a tradition of the property be executed. In order to be effective, the tradition must involve a change in possession of the right to dispose of the property. However, it has been argued that the principle of tradition should be repealed and replaced by the principle of immediate transfer of ownership.
The Company Reorganization Act has been criticized for its inconsistencies with the Bankruptcy Act and its failure to provide instruments with which to conduct successful reorganizations. A special investigator has now submitted a report to the Ministry of Justice that proposes a unified Insolvency Act in order to improve reorganization processes and their coordination with bankruptcy proceedings.
Under normal market conditions the administrator of a bankrupt credit institution, in order to create liquidity, would simply sell or transfer parts of the securities into bank paper. However, during the financial crisis this was deemed to be unsatisfactory. Therefore, the government has drafted a proposal to clarify the administrator's authority in such cases.
In 2004 the Right of Priority Act was extensively revised with the aim of creating conditions in which distressed companies could more easily recover. However, the changes led creditors to increase their demands for granting credit and the act has now been returned to a form similar to that before its 2004 revision.
The Company Reorganization Act sets out the procedure for commencing specific proceedings for the reorganization of undertakings which are experiencing difficulties in fulfilling their payment obligations. The instruments available under the act include debt rescheduling through judicial composition and government-funded wage guarantees to increase liquidity.
The Court of Appeal recently ruled that when applying Article 3(1) of the EU Insolvency Regulation in order to establish the international jurisdiction of Swedish courts, a natural person who is not a businessman shall be considered as having his or her prime interests in the country in which he or she is civil registered, unless that person can demonstrate that his or her prime interests lie elsewhere.
The general principle of recovery is that an act may be annulled if it unfairly favours a particular creditor to the disadvantage of other creditors. However, the issue raises questions of interpretation and particular considerations apply in respect of payments of preferred claims, tax payments and payments of third-party claims.
A pond containing toxic water burst at a Spanish mine owned by a subsidiary of Swedish company Boliden, which subsequently went bankrupt. The bankruptcy estate duly brought a lawsuit against Boliden AB and Boliden Mineral AB with a request for sequestration. A Swedish court of appeal found that the Spanish sequestration order was enforceable in Sweden.
The representatives of an insolvent company must provide the bankruptcy court or the receiver with all information requested as of potential relevance to the bankruptcy investigation. This obligation also covers assets that are not included in the estate because they are located abroad. The board members must also attend the estate inventory meeting and swear an oath attesting that the inventory is correct.
The Administrative Court of Appeal recently ruled that the publication of a bankruptcy estate inventory on the Internet constituted a violation of the Personal Data Act, which has been in force since 1998. The court ruled that the interest of the bankruptcy receiver in fulfilling its duties must remain secondary to individuals' privacy.
The legal position of creditors in corporate insolvency cases varies. There are four types of proceedings that may take place, depending on the particular circumstances: voluntary liquidation; compulsory liquidation; company reorganization; and bankruptcy.
In 2004 the Right of Priority Act was extensively revised. The main changes were that: (i) the priority rights in bankruptcy were abolished for taxes and tenancy; and (ii) floating charges could be claimed on 55% of the creditor’s assets only. A primary aim of the revision was to create an increase in the dividend in bankruptcy for unsecured claims.
The Supreme Court has recently changed its case law on the forced sale of co-property. Previously, distraint of one of the co-owners' interest in the property was insufficient to enforce an executive sale of the whole property where a contract to prevent such a sale had been entered into by the co-owners. However, following the court's decision such contract no longer prevents the executive sale of the property.
The Supreme Court has recently ruled that a creditor in bankruptcy is entitled to post-distribution payments even where the limitation period has expired. According to the court, the limitation period under the Limitation Act does not apply in this case.
The Supreme Court has recently ruled that no general liability for damages falls on a bankruptcy receiver who brings a lawsuit without appropriate cover for legal costs that might accrue should the bankruptcy estate be unsuccessful. The court held that, under Swedish law, a plaintiff need not be able to reimburse the defendant for its legal costs should the plaintiff lose the case.
A liquidator or administrator in an insolvency procedure must be an individual and cannot be a legal entity. Among other things, this update reviews which official deals with each type of insolvency procedure, as well as the applicable legislation.
In order to implement EU Directive 2002/74/EC - which amends the EU Wage Guarantee Directive - the Swedish Parliament has amended the Wage Guarantee Act. Governmental wage guarantee compensation will now be paid to employees even if the insolvent employer is domiciled in another EU or EEA member state, provided that the employee has carried out most of his or her work in Sweden.