SWEDEN: An introduction to Restructuring/Insolvency: Trustees/Administrators

Restructuring and Insolvency in Sweden: Practice Area Overview

In recent years, Sweden has seen a marked increase in major companies entering into reorganisation and bankruptcy proceedings. This trend highlights the growing complexity of financial distress in a challenging macroeconomic environment, where companies are dealing with rising operational costs, global volatility, and the delayed financial impact of COVID19 relief measures.

The new Swedish Reorganisation Act has emerged as a pivotal tool for larger businesses with sophisticated capital structures. Its modernised framework offers more flexible and efficient restructuring options compared to the previous legislation, allowing companies to address financial instability through court-supervised reorganisation, rather than heading straight into insolvency.-

A related and growing trend involves Swedish companies with global operations turning to US Chapter 11 protection, either as a standalone solution or in parallel with Swedish proceedings. This dual-track approach reflects the need to restructure both domestic and international obligations, and Chapter 11’s low threshold and broad scope make it increasingly attractive for Swedish corporates with exposure to US or global markets.

Economic and Sector Trends in Sweden

Sweden’s economy, like many others, is feeling the aftershocks of the pandemic, global supply chain disruptions, and inflationary pressures. One of the most significant drivers of financial distress has been the repayment of COVID-era tax deferrals granted by the government. While these helped businesses stay afloat during the crisis, they have since become burdensome liabilities—tipping many companies into insolvency or forcing restructuring discussions.

A number of key sectors are under mounting financial strain:

• • The retail sector continues to downsize in response to shifting consumer habits and tightening household budgets.
  • The hospitality industry, including restaurants and event businesses, remains sensitive to economic fluctuations, with many unable to return to pre-pandemic activity levels.
  • The wind power sector, despite Sweden’s green energy ambitions, is facing mounting pressure from the volatile electricity price and underperforming projects—pushing several into or toward reorganisation.
  • The green investment space is seeing cracks as capital-intensive sustainability initiatives face increased scrutiny. Companies like Northvolt AB and Renewcell AB have recently entered insolvency, signalling structural risks in the sector despite strong long-term demand for green innovation.
  • The builders and housing market is emerging as a significant point of concern. Rapid interest rate hikes, a slowdown in housing demand, rising material costs, and increased financing constraints have severely affected construction and property development. Several firms in this sector are facing acute liquidity issues, with some already initiating reorganisation proceedings.

Geopolitical Factors and Tariff Risk: Spotlight on Automotive

Beyond domestic economic issues, geopolitical tensions and trade policy shifts are introducing new risks to Swedish businesses—particularly those operating internationally. One sector under close observation is the automotive industry, which is highly exposed to potential US tariffs on vehicles, parts, and raw materials. Tariff changes or export barriers could severely disrupt their operations, delay strategic investments, and increase restructuring risk.

Cross-Border Tools: US Chapter 11 Gaining Ground

One of the more notable developments in Sweden’s restructuring landscape is the increasing use of US Chapter 11 filings. Swedish companies, particularly those with international footprints or US investors, are turning to Chapter 11. The major airliner SAS would be seen as a successful case and the Intrum case is still ongoing. However, the efficiency of using US Chapter 11 has been questioned following Northvolt AB filing for bankruptcy after spending major sums on a Chapter 11 proceeding.

The recent cases show that Swedish debtors becoming more strategic in their use of jurisdictional options, and the dual-track approach—Chapter 11 combined with Swedish reorganisation—is expected to become more prevalent for large, complex restructurings also going forward.

Legal Reforms Supporting Restructuring

The Swedish Reorganisation Act (Lag om företagsrekonstruktion), revised in alignment with the EU Restructuring Directive, has modernised Sweden’s legal approach to insolvency. The law facilitates early intervention, creditor engagement, and value-preserving solutions for businesses in distress. It also enables companies to implement operational and financial restructuring while remaining in control of day-to-day management.

The alignment with EU standards improves cross-border compatibility, especially for international investors and creditors. This creates a more predictable and transparent environment for restructuring efforts.

Notable Firm Activity

A number of Swedish law firms remain highly active in complex restructuring and insolvency matters, frequently acting as court-appointed administrators, bankruptcy trustees, or counsel in major proceedings. Recent notable engagements include:

Carler

The firm has acted as administrator in several high-profile reorganisation cases, including We Are Padel, Footway, and the regional airline BRA. Carler has also served as bankruptcy trustee in a series of proceedings involving amongst others a part of the Brödernas group.

Cirio

Cirio’s restructuring team has been appointed as administrators under the new Swedish Reorganisation Act in several significant matters, such as Sushi Yama, MatHem, Leo's Lekland, Kungsängen, OfficeDepot, NA-KD, Kvalitena, and Brödernas. The firm has also acted as bankruptcy trustee in major cases including Renewcell AB, Teknikmagasinet SWE AB, the Bolagsspecialisten group, tretton37 AB, and Ellos AB. In addition, the team advises on both debtor- and creditor-side restructurings and regularly represents buyers in distressed M&A transactions.

DLA Piper

DLA Piper has been appointed as bankruptcy trustee in the high-profile insolvency of Northvolt Expansion AB, one of the most significant mandates of 2024. Lawyers from the lawfirm serves as trustee in the notable bankruptcies of Oscar Properties and The Body Shop Svenska AB.

Fylgia

Recent mandates include acting as administrator for Convendum AB and serving as bankruptcy trustee for Taverna Brillo, Cake 0 Emission AB, and Luthman Nordic AB.

Schjødt

Schjødt has taken on a number of prominent trustee appointments, including in the bankruptcies of whisky producer Mackmyra, Brothers, Sätra Centrum Fastigheter AB, Payer Financial Services AB, the Gotoga group, and Cura of Sweden AB. The firm has also served as administrator in Libergs Sweden AB, and continues to represent both creditors and debtors in significant restructuring matters.

CMS Wistrand

Following its integration into CMS in 2024, Wistrand has continued its active role in the field, serving as bankruptcy trustee in Kvalitena AB (publ), Serneke Sverige AB, and paceM2 For Smart Living AB. The restructuring team is also engaged on the creditor side in several large-scale reorganisations.