Swiss Supreme Court clarifies that a
sale of assets during composition
proceedings with consent of the
bankruptcy court does not require
shareholder approval (5A_53/2026)

Background

A company in composition proceedings (Nachlassverfahren) may sell capital assets (Anlagevermögen) with consent of the bankruptcy court (art. 298 of the Federal Act on Debt Enforcement and Bankruptcy ("DEBA")).

Given companies subject to composition proceedings are still up and running (albeit under the control of the court), there has been a dispute in legal doctrine whether – in addition to court approval – also the regular consent requirements under corporate law apply. In particular, if a company sells substantially all its assets, this usually constitutes a de facto change of the company's purpose and requires consent of a shareholders' meeting with 2/3 of the votes present (or higher quorum according to the articles).

Rules on composition proceedings trump corporate law

With its decision 5A_53/2026 of 4 May 2026 the Swiss Supreme Court puts an end to such discussion by holding that the rules on composition proceedings supersede and replace those of corporate law: If the bankruptcy court has approved the sale of assets (e.g. shares in subsidiaries, including a hive off vehicle), no additional shareholder approval is required, even if that were the case under general corporate law.

Creditors and shareholders have no party rights when the bankruptcy court approves a sale

In addition to clarifying the relationship between the DEBA and corporate law, the court confirmed and expanded its earlier decision BGE 147 III 226.

When a company in composition proceedings seeks the approval of the bankruptcy court for a sale of assets under art. 298 II DEBA, neither the company's creditors nor its shareholders have a standing as a party in such proceedings – in particular, they cannot challenge the approval of the bankruptcy court.

The Supreme Court explicitly clarified that there is no right of creditors or shareholders to be heard before the sale or to be given the opportunity to place a competing offer.

Practical Implications

The decision brings a welcome clarification and is of high practical importance. So far, selling substantially all assets of a company during an early stage of composition proceedings without shareholders' consent entailed uncertainty whether the validity of such sale might later be challenged; which limited the attractiveness of this approach to potential acquirers. On the other hand, obtaining shareholders' consent is often not a viable option due to timing constraints and publicity risk – especially where a company has a large and heterogeneous number of shareholders.

The decision solves this uncertainty and renders the option of composition proceedings with a sale of assets (pre pack) more attractive – which should be considered by boards of directors facing a financial distress situation.