Insolvency

Lindahl's work in insolvency law includes bankruptcies, reconstructions, and liquidations. We undertake assignments as bankruptcy trustees and company reconstructors following appointments from courts. We receive liquidation assignments either from the company's shareholders or from the Swedish Companies Registration Office. Additionally, we also act as representatives and advisors for companies in financial difficulties, as well as for creditors.

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How our experts can assist

Lindahl's experts in insolvency law have extensive experience in assessing which measures are appropriate in each individual case. This may involve negotiating with creditors for a voluntary composition (i.e., debt reduction), restructuring the business through a formal company reconstruction, or placing the company into bankruptcy.

If the right action is taken at the right time, bankruptcy can often be avoided, allowing the company to overcome its financial difficulties and regain profitability. If it is determined that bankruptcy is the only realistic option, there is also the possibility to request us as bankruptcy trustees.

We also assist creditors in negotiations with debt-laden companies, matters concerning the right to separate certain property, and in monitoring claims in bankruptcies and company reconstructions. Additionally, we act as representatives in insolvency-related disputes, such as claims for recovery under the rules of the Bankruptcy Act or demands for the return of unlawful value transfers under the rules of the Companies Act.

We also undertake assignments as liquidators for companies that are to be wound up. Liquidation of a company requires that the company can settle all its debts, which distinguishes it from bankruptcy where creditors do not receive full payment. The similarity lies in the fact that it involves a legally regulated winding up of a company and its operations. Lindahl's specialists in insolvency law take on assignments as liquidators and ensure that the winding up is conducted in accordance with the regulations.

Most insolvency cases involve limited companies, but Lindahl also regularly handles and assists with bankruptcies, reconstructions, and liquidations of other legal entities such as partnerships, economic associations, and non-profit organizations, among others.

This is insolvency law

Insolvency law becomes relevant when a company or an individual (hereinafter also referred to as "debtor") has become, or is at risk of becoming, insolvent. Insolvency means that the debtor cannot pay their debts as they fall due and that this inability is not merely temporary.

When a company is solvent, there is no competition among its creditors; everyone gets paid. In insolvency, rules are triggered that aim to orderly manage the competition among creditors for the debtor's assets. The provisions in, among others, the Priority Rights Act, the Bankruptcy Act, and the Company Reconstruction Act aim to ensure equal treatment of creditors and thereby prevent a race for the debtor's assets. The Penal Code's provisions on creditor offenses also serve the same function.

Certain types of payments and other legal actions taken in an insolvency situation can, in a subsequent bankruptcy, lead to recovery claims against the creditors and other parties who have been favored at the expense of others. Such claims, particularly under the Bankruptcy Act's rules on recovery, are relatively common in bankruptcy. Unduly paying debts to certain selected creditors can, in some situations, even lead to criminal liability.

In an insolvency situation, high demands are placed on the actions of the company's management. If the board, for example, is passive during a critical capital shortage and fails to fulfill the obligation to prepare a so-called control balance sheet, the result can be personal liability for the new debts incurred by the company. And if tax debts are not paid to the Swedish Tax Agency by the due date, there is a significant risk that the company's management will be personally liable for these through the so-called tax representative liability.

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Bankruptcy

What does bankruptcy entail? Which are the possible paths forward when your company cannot pay its debts? Lindahl's lawyers have handled some of the largest bankruptcies in Swedish history.

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Corporate restructuring

Corporate restructuring can be an alternative to bankruptcy when your company cannot pay its debts.

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