The wave of bankruptcies hits Switzerland with full force

The bankruptcy wave rolls and rolls: with an increase of over nine percent compared to 2018/2019, i.e. before the Corona pandemic, it is reaching a new peak. The creditor protection organization Creditreform does not expect any more big changes by the end of the year. Creditreform had expected since the beginning of government pandemic aid in the spring of 2020 that so-called Zombie Companies were only given a reprieve because they were simply ready for bankruptcy. Now this additional liquidity has been used up, and the only thing left to do is to go to the bankruptcy court.

End of the wave of bankruptcies not in sight

Creditreform expects around 6,700 insolvencies for the year that is coming to an end. And it does not look as if this wave of bankruptcies will abate in 2023, according to the organization's assessment. It may even get worse in view of an emerging economic slowdown.

The figures speak for themselves: a comparison of the insolvency figures for 2018/2019 with the average for the three subsequent years shows that there is still "catching up to do", with a drop of just under nine percent. This is because bankruptcies were already on the rise in 2019, meaning that this rising trend is now also likely to continue with a delay. The pressure on companies will also increase further in the coming year due to supply chain problems, which will lead to a rise in purchasing prices, and higher energy costs.

Problem: Bankruptcy Riding

Insolvencies due to organizational deficiencies are almost 47 % higher than in the previous year. An amendment to Art. 731b of the Swiss Code of Obligations (OR), which has already come into force on January 1, 2021, is now having an effect. This still makes sense, as it removes from the commercial register those companies that no longer have any business activity.

There are increasing signs that more and more companies want to get rid of their debts by leaving the company without the necessary bodies. According to Creditreform, these abusive bankruptcies will continue to increase. Here, he said, there has already been a significant increase in suspicious cases since September 2021: At that time, 47 cases of suspected abusive bankruptcy were identified, with a peak subsequently in the months of December 2021 and January 2022 with 63 and 66 cases, respectively. On average, Creditreform identified 55 suspicious cases per month from January to November 2022.

New registrations, deletions, net growth

But on the other hand, many new companies are still being founded, albeit at a somewhat lower level than in the previous year. 45,111 new companies were entered in the commercial register from January to November, 1.2 % fewer than a year earlier. By the end of the year, we expect over 49,400 new registrations. Deletions may be slightly below the previous year, with net growth thus declining by around 3.4 %.

Source: Creditreform