40 billion package - a fallacy - MKY GROUP

According to the Federal Council decision of March 20, 2020, the federal government will support the Swiss economy with a CHF 40 billion package. The top priority of this measure is to secure employment and wages. The package includes short-time work compensation and guaranteed COVID bridging loans. This aid is intended to provide companies affected by COVID with the necessary liquidity as quickly and unbureaucratically as possible. But mindfulness is also required here. It is a fallacy that loans can now be made unconditionally.

Loans

The federal government has decided that solvent companies affected by COVID may apply for loans of up to 10 percent of turnover or a maximum of 20 million francs. According to the Federal Council, half a million francs should be sufficient in 90 percent of cases. The necessary key points will be set out in an emergency decree, which will be adopted in the middle of next week. Details of the modalities of these applications can only be answered from then on.

Underbalance — restructuring measures

However, extreme caution is required, especially for companies with a tight own capitalization. The Code of Obligations requires companies that if half of the share capital is no longer covered, the board of directors of an AG or the managing director of a GmbH must immediately apply for restructuring measures to the general meeting.

over-indebtedness

If there is a reasonable concern of over-indebtedness, an interim balance sheet must be prepared and submitted to an approved auditor for review. If this interim balance sheet shows that the claims of the company creditors are not covered in terms of continued or sale values, the Board of Directors must notify the judge unless company creditors resign in rank behind all other company creditors to the extent of this shortfall. Upon notification, the judge opens bankruptcy.

Risk if bankruptcy filing is delayed

If a company is already over-indebted, no further loans should be granted in principle. If the bankruptcy filing is delayed, the managing director risks making himself liable to prosecution.

measures

Should entrepreneurs depend on the support package or on loans, the possible risks should first be examined with the bank or trustee.

The systematic model for the stakeholder approach (see image) shows that we as a society have a joint responsibility to successfully overcome the corona crisis and not to unnecessarily burden the state.

Our escrow team will be happy to provide you with further information.

MKY Group AG

Disclaimer: The content of this blog post is for informational purposes only and does not constitute professional advice. Each individual case should be reviewed individually and we recommend that you seek professional advice for specific questions.