The Swiss Federal Supreme Court has issued a landmark decision that significantly alters the balance of power between shareholders and creditors during corporate distress. According to ruling 5A_53/2026, when a company is placed under a composition moratorium, shareholders lose all statutory rights to approve or block asset disposal transactions. Experts at the prominent Swiss law firm Lenz & Staehelin emphasize that this judgment eliminates critical legal uncertainty, allowing for swift corporate rescues without owner obstruction.
The Conflict: Corporate Framework vs. Insolvency Reality
Under standard Swiss corporate law, corporate asset sales fall within the competence of the board of directors. However, authority shifts to the shareholders if a transaction involves all or a substantial part of the company’s assets, resulting in a factual liquidation with no intent to reinvest proceeds. Executing such sales without shareholder approval risks making the transaction null and void. Previously, the Supreme Court admitted exceptions only if a company was heavily over-indebted, facing a severe time crunch, or caught in a shareholder stalemate.
The New Ruling: Composition Proceedings Supersede Corporate Rules
In its decision published on May 27, 2026, the Supreme Court established that composition and restructuring rules completely override general corporate law provisions during a moratorium. The operational framework is now governed by the following parameters:
Supervised Management: The existing board and management remain in place to conduct day to day operations but must act under the strict supervision of the court and the appointed administrator.
Judicial Mandate Over Shareholder Consent: Transactions involving non-current assets (such as real estate, heavy machinery, or subsidiary investments) no longer require general meeting approvals. Instead, they require the authorization of the court or the creditors’ committee.
The Urgency Benchmark: The court will sanction an asset disposal if time is of the essence, provided the transaction actively supports the restructuring process and protects creditor interests.
No Legal Standing to Object: Once judicial approval is granted, shareholder consent is legally irrelevant, even if the transaction leads to a factual liquidation. Furthermore, shareholders lack the legal standing to challenge the court’s authorization.
Business Outlook: This precedent offers robust protection for pre-pack transactions and distressed asset disposals, ensuring they can be executed under tight deadlines without fear of shareholder holdouts. Nevertheless, directors must remain mindful of their fiduciary duties: if a residual equity value exists after settling creditor claims, shareholder interests cannot be entirely disregarded during the restructuring design.