Debt restructuring moratorium (composition moratorium) and composition proceedings under Swiss debt enforcement and bankruptcy law

Moratorium

A debtor facing insolvency or over-indebtedness may apply to the competent cantonal court for a moratorium. During the moratorium, enforcement proceedings are suspended, the debtor's operations are supervised by the composition administrators, and an inventory of assets is prepared. The moratorium is publicly announced and entered in the debt enforcement register (see The Swiss Debt Enforcement Register: What it says – and what it doesn't say - GGI FYI DCRI News No 19 February 2026).

Composition proceedings

The proceedings shall lead to a composition agreement between the debtor and its creditors. The court first grants a provisional moratorium of up to four months. If an agreement appears realistic, it appoints one or more composition administrators and grants a definitive moratorium of four to six months, extendable up to 24 months in complex cases. Two forms of composition agreement are available (to be confirmed by the court):

Ordinary composition agreement

The debtor offers creditors a dividend or payment deferral. Court confirmation requires approval by a qualified majority. Once confirmed, the agreement binds all unsecured creditors.

Composition agreement with assignment of assets

The debtor assigns assets to creditors or a court-appointed liquidator for realisation and pro rata distribution. This instrument is suited for entities that are not viable as an ongoing company.

Key characteristics

Feature	Detail
Automatic stay	The moratorium triggers an automatic stay on all enforcement proceedings against the debtor. New enforcement actions may not be initiated, and pending proceedings are suspended for the duration of the moratorium.
Secured creditors	Creditors holding a pledge or other security interest over the debtor's assets are largely unaffected by the moratorium. Enforcement against pledged assets may proceed, though the composition court may impose restrictions to protect the restructuring process.
Debtor in possession	Unlike bankruptcy proceedings, the debtor retains possession and management of its assets during the moratorium. The composition administrator supervises rather than replaces management. Certain acts still require the authorisation of the composition court or the creditors' committee.
Failure of proceedings	If the composition court does not confirm the composition agreement it will ordinarily open bankruptcy proceedings ex officio. Bankruptcy may also be opened during the moratorium if the prospect of a successful restructuring or agreement is found to be absent at any stage.

Only a brief overview can be provided by this article. The procedures involve numerous details and exceptions. Legal advice is highly recommended. 

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Michael Bosshard, partner at Bratschi Ltd. since 2025, is specialised in energy law with years of experience as in-house legal counsel. He also covers contract, enforcement, corporate, and administrative law.