Moratoria during COVID-19 pandemic an overview – Newsletters – International Law Office

A moratorium under the Debt Enforcement and Bankruptcy Act is a standstill period granted by a court for a company going through financial hardship to assess whether it can enter composition proceedings or go bankrupt.

Originally, unlike in other jurisdictions, the purpose of a moratorium in Switzerland was not necessarily to continue doing business, but rather to find a better way to liquidate a company; however, this has changed as a result of the COVID-19 crisis. There is now another type of moratorium under Swiss law (although probably only until 20 October 2020), which is intended to promote restructuring.

An ordinary moratorium is granted by a S…