Monday, February 23, 2009

Swedish Law – Reorganisation Requirements

I will in a couple of blog posts go in to more detail about the Swedish Company Reorganisation procedure. From the press coverage of the SAAB decision to avail itself of the Swedish reorganisation rules I note that some journalists do not seem to be very well informed of the content of the rules.

Provided it could be assumed that a Swedish company will be unable to pay its debts due or that such a situation is likely to arise in the near future, a court decision to reorganise the company may be passed, unless there is no good reason to assume that the purpose of the Swedish Company Reorganisation Act will be achieved. A further requirement is, of course, that the company either itself applies for reorganisation or consents to an application made by a creditor.

It is thus a clear legal requirement that that there is some chance of a reorganisation succeeding. However, as long as the possibility of the reorganisation is not excluded there still is such a chance.

It should also be noted that the possibility of success will be looked upon at the meeting of the creditors held within three weeks from the court’s reorganisation decision, when the additional information about the situation in the company will be presented by the administrator.

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