Tuesday, March 17, 2009

Swedish Law – Company Reorganisation – Termination of Reorganisation

Before I go into the next steps in a successful company reorganisation, I find it appropriate to mention the situations where the reorganisation will be terminated by the district court. They are:

  • when the purpose of the reorganisation is deemed to have been achieved,

  • if the company requests a termination and a decision to proceed to composition has not been passed,

  • if the company fails to participate in the creditors’ meeting,

  • if the administrator or a creditor so requests and the purpose of the reorganisation is deemed not to be possible to achieve and

  • if a special cause otherwise exists for a termination.

As mentioned in an earlier blog post, the time period during which the administrator should finalise his action to achieve a reorganisation is three months from the date of the reorganisation decision by the court. In line with that, the court has a duty to terminate the reorganisation three months from that decision.

However, if special causes exsist, the court may prolong this period by additional periods, each time of a maximum of three months, but the total reorganisation period may not exceed one year.

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