Monday, March 16, 2009

Swedish Law – Company Reorganisation – Right to Set-Off (continued)

The first of the exemptions from the right to set-off mentioned in my last blog post covers claims on the company acquired from a third party later than three months prior to the date when the application for company reorganisation was filed. Such a claim may only be offset against a claim which the company possessed at the time at which the creditor acquired its claim, if the acquisition could be deemed as ordinary.

Also exempted are claims where the creditor has incurred liabilities towards the company under such circumstances as may be equated with payment other than by customary means of payment, but only to the extent such payment could have been the subject of recovery procedures according to the recovery rules in the Swedish Company Reorganisation Act (1996:764). These rules will be covered later as they are part of the provisions regarding judicial composition.

It should be noted that a claim of a guarantor or other person who has acquired a claim, because he has satisfied an obligation (right of recourse), shall be deemed to have been acquired at the time when the obligation of the guarantor or such other person arose and not at the later date when the claim was acquired.

If, after the date when the application for company reorganisation was filed, the company transfers a claim in such a manner that a creditor thereby loses its right to set-off, the company shall compensate the creditor.

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