Global Restructuring Review - Cross-border restructuring and insolvency legal news, features and events

GRR 100 2018

Schellenberg Wittmer

04 May 2018

The Swiss firm managed to secure a 120% payout for creditors of an insurance company in early 2017

Global head of restructuring and insolvency Vincent Jeanneret
Partners in restructuring team 4
Restructuring lawyers in Who's Who Legal 1
Active cross-border restructuring and insolvency matters 25

History of the practice

Restructuring has been a core practice at Schellenberg Wittmer since the firm was founded in 2000 through the merger of Schellenberg & Haissly in Zurich and Brunschwig Wittmer in Geneva. Today it has one of the pre-eminent insolvency teams in Switzerland with expertise in complex cross-border work.

Practice leader Vincent Jeanneret is a qualified insolvency administrator and has been involved in most of the major Swiss insolvency proceedings of the past 18 years. He is often the counsel of choice for the Swiss government and the Swiss Financial Market Supervisory Authority (FINMA).

Of counsel Olivier Hari has written a well-regarded PhD thesis on court-appointed trustees.

Network

The firm's restructuring team is split between Geneva and Zurich, though its focus tilts towards French-speaking Switzerland.

Who uses it?

As the firm includes registered administrators it is often retained by the Swiss market regulator, FINMA, to liquidate struggling companies. Asset manager Stigma Partners and EP Electricité are among its Geneva-based clients.

It is also used by major corporates and overseas insolvency professionals to advise on matters of Swiss law in international restructurings.

Historic track record

Schellenberg Wittmer's first FINMA case related to the global insolvency of the Icelandic banking group Kaupthing. It was appointed liquidator of the Swiss branch of Kaupthing Bank Luxembourg when it entered bankruptcy following preventive measures imposed by FINMA. It cooperated with teams of liquidators in other jurisdictions, including in Luxembourg, where the liquidators were entrusted with handling the assets of the Swiss brand, which Switzerland saw as a breach of sovereignty.

The firm was also called in by the government again as administrator of private health insurance company SUPRA Assurances, in the first-ever liquidation of an insurance company in Switzerland under the 2013 Ordinance on the Bankruptcy of Insurance Companies. SUPRA had the legal status of a foundation and the case included accusations of improper behaviour against its directors. Schellenberg Wittmer as administrators transferred the business to a subsidiary and recreated an independent board to oversee a group of 7,000 insured people.

Jeanneret was selected as one of two court-appointed receivers for oil refiner Petroplus, while the firm also acted as M&A adviser to the debtor group in its sale to a new company. The case ran into problems when trying to reconcile the interests of creditors in different jurisdictions including the UK, France and Germany, despite locally appointed liquidators working together to maximise the sale of assets. The firm notes that the global sale of the company required the execution of a complex purchase agreement that had to be approved by two Swiss courts at short notice. Although begun in 2012, the case is still ongoing.

The firm set a precedent with its work on the bankruptcy of pension fund manager Fondation Hypotheka following a fraud scandal, using a Swiss law implemented in January 2014 to obtain the first restructuring moratorium – or sursis concodataire – against it. The company refused to comply with the moratorium and appealed, but the Swiss Federal Tribunal rejected that appeal in October 2016, applying the new law's sanction for failing to comply with a restructuring moratorium, which was to declare the company bankrupt instantly.

Recent events

Schellenberg Wittmer continues to be retained by FINMA, including as liquidator of insurance group Zenith Vie, over which it has been in charge since 2014. Zenith Vie's insurance portfolio was transferred to another insurer, Palladio Assurances, in December of that year, but litigation proceedings and related criminal investigations continue.

In early 2017, Schellenberg Wittmer managed to negotiate a 120% dividend pay-out for creditors of SUPRA Assurances taking into account interest payable. It was able to finance the dividends paid through collection of voidable dividends paid to shareholders in the past.

Client comment

A client that wished to stay anonymous said it had collaborated with the Schellenberg Wittmer team in complex and cross-border bankruptcies, noting that team was highly skilled and that it provided objective advice. "In a recent case, we used this law firm to help us in order to recover money in a foreign country. The know-how of the lawyers allowed us to act in this country and to recover the amount due," the client noted.