Significantly more bankruptcy proceedings opened in 2019

   After a year with less than average new bankruptcy proceedings opened, the statistics levelled off again in 2019, with 451 bankruptcies coming before the Zug cantonal court last year - 81 more than in the previous year. "This means that the number of bankruptcy filings in 2019 were the same as the average level over the past ten years," explains Andreas Hess, head of the Commercial Register and Bankruptcy Office of the Canton of Zug.

The total amount of bad debts for which a loss note was issued in 2019 increased to around CHF 36.4 million, compared to around CHF 34 million in 2018. 406 of the newly opened bankruptcies related to companies and individuals registered in the commercial register. 139 of these proceedings (previous year 137) were opened following regular enforcement (Betreibungen) and 74 (previous year 44) due to deposit of balances.

60% of the 451 bankruptcy filings had their origins in the Federal Law on Debt Enforcement and Bankruptcy - 276 proceedings, compared to 220 in the previous year. This increase had another reason, explains Hess: "40 percent of bankruptcy bankruptcies are not caused by over-indebtedness, but an organisational deficiency." 175 bankruptcy bankruptcies were due to an organisational deficiency in 2019, which was 25 more than 2018. A deficiency exists if the organisation of a company does not comply with the statutory provision with regard to administration, representation or audits. As an example, Hess mentions a stock corporation in which the last board member resigned. “If this obligatory post is not filled, there is a lack of organisation, and if the limited company (AG) does not remedy the defect, the company will be dissolved.”

Five cases were re-opened because assets emerged, and three bankruptcies opened by foreign courts were also extended to Switzerland. The cantonal court also ordered the liquidation of 44 rejected inheritances.

                            Commercial Register and Bankruptcy Office of the Canton of Zug

In total, the bankruptcy office had to deal with 833 proceedings last year, compared to 826 in 2018. 54 bankruptcies were closed after the procedure was carried out, while 265 were closed due to a lack of assets. The procedure was revoked in five cases, and 19 bankruptcy claims were successfully contested.

With 490 cases pending, 116 more procedures were carried over to 2020 compared to the situation in the previous year. This was due to the 81 additional bankruptcies mentioned earlier. "We had more work on the table, so that previous procedures sometimes couldn’t be continued," explains Andreas Hess. The procedures have also become more complex and have more to do with foreign countries, which, in turn, can lead to more delays.

When asked whether fewer pending jobs can be expected in the future, the head of the office replied in the negative. The appointment of two additional employees has been approved for 2020, which will provide short-term relief, although the number of procedures is expected to increase drastically from 2021, because a new legal provision then comes into force, by which a liquidation is also ordered for companies without a valid domicile. "That will give us about 150 more procedures," predicts Hess. "But the work remains manageable for us."