It has become increasingly clear that after the initial shock caused by the COVID-19 lockdowns, businesses will face lasting challenges. Against this background, a growing number of investors will need to assess how to deal with distressed business units or entire companies. This article provides an overview of corporate and financial reorganisation options, particularly with regard to the sale of distressed companies or business units and carve-out transactions.
As the Corporate Responsibility Initiative was rejected, an indirect counterproposal will likely enter into force, introducing reporting duties for companies of public interest and due diligence duties for companies active in certain high-risk areas. The potential penalties and liability, and the potential reputational risks stemming from violations of these duties, are relevant for the acquisition of or investments in Swiss companies. Thus, the counterproposal will affect due diligence in M&A and financing transactions.
In June 2020 the legislature passed draft modifications of Swiss corporate law, which would amend, among other things, substantial parts of the Code of Obligations. This marked the end of what is generally known as the 'large corporate law reform' which officially started in 2007. As part of these 'final' modifications, the provisions concerning the reduction of the share capital of Swiss corporations will be amended.
The Takeover Board recently confirmed its case law on whether the obligation to make a public takeover offer may be fulfilled by completing a merger. However, the Takeover Board's arguments were based heavily on the specifics of the case at hand. It seems possible, if not likely, that the Takeover Board would have come to a different conclusion had the merger been structured differently.
Following the widespread outbreak of COVID-19 in Switzerland, the Federal Council implemented several emergency measures to mitigate the virus's economic impact. After weeks of pressure from the growing Swiss start-up ecosystem, the Federal Council acknowledged that start-ups had little or no access to the existing emergency aid and, considering their importance for the economy as a whole, stated that it would devise a liquidity support programme specifically designed for innovative start-ups.