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Swedish Law ? Company Reorganisation

Duties of the Administrator

The administrator is obliged to inform all known creditors of the company of the reorganisation decision within one week. Such information shall also include

• a preliminary schedule of the assets and liabilities of the company,
  
• the most recent balance sheet and any additional information required about the company?s financial position,
  
• the reasons for the payment difficulties and how the business activities of the company may be reorganised and
  
• information about the date of a creditors meeting set by the court in connection with the reorganisation decision.
  

The last mentioned court meeting shall be held within three weeks from the date of the reorganisation decision or, if it is an unavoidable necessity, a later date.

The Swedish Company Reorganisation Act requires the administrator to examine if the business activities of the company can be continued, in whole or in part, and, if so, how this can be achieved, and, finally, if it is possible for the company to obtain a composition with the creditors.

A plan which sets out the manner in which the goals of the reorganisation shall be achieved shall also be prepared by the administrator in consultation with the company.

What the act does not explicitly state is that the administrator, together with the management and board of the company, has to find ways to finance the continued activities and the possible composition with the creditors. Normally this is the major obstacle and less than 10 per cent of the Swedish company reorganisations are successful.

The administrator has to take these actions within a period of three months unless the court finds it necessary to prolong this period for additional periods of three months but no longer than one year.

Full post as published by Swedish Law Blog on February 25, 2009 (boomark / email).