IBA Conference Buenos Aires

1. IBA Conference Buenos Aires Joint Session between the IBA Insurance Section and ICC FraudNet 16 October 2010 Asset Tracing in Respect of Subrogated Fidelity Bond Insurance Claims Switzerland Yves Klein Monfrini Crettol & Associés, Genevawww.mcswisslaw.com

2. Switzerland Characteristics of the Swiss legal system • Federal State with 27 laws of civil or criminal procedure (unification within the next five years). • No concept of tracing of assets or of constructive trust. • Discovery proceedings almost inexistent; banking secrecy generally opposable to civil proceedings; generally, no production orders against third parties.

3. Switzerland Subrogation • Recognition of subrogation only to the extent that the laws governing both the respective obligations (Fraudella-Fernandez and Fraudella-Insurance) allow it (Art. 144 Swiss Private International Law Act - PIL). • Applicable law would be that of the State of Florida (Art. 133 and 117 PIL)

4. Switzerland Rights against the Swiss Company • Debt Enforcement and Bankruptcy Act of 1994 (DEB) based on official Debt Enforcement and Bankruptcy Offices (DEBO). • Creditor needs to request the Swiss company’s bankruptcy from a Swiss court, after having obtained an order to pay issued by the local DEBO and a judgment enforceable in Switzerland, unless the loan was guaranteed by a bill of exchange or if prima-facie evidence exists that the Swiss company has suspended its payments to all its creditors. Interim measures from the bankruptcy court. No autonomous attachment of assets. • During first stage, bankruptcy administered by an official receiver from the local DEBO. • No access to information until list of creditors is established by receiver (3 to 6 months). • The first meeting of creditors may decide to have the DEBO appoint a private receiver if there are sufficient liquid assets or if a creditor makes the advance of the expenses. • If the receiver decides not to pursue the bankruptcy estate’s claims against third parties, any creditor may request to be given the right to enforce the bankruptcy estate’s claims and will be entitled to have his claim and expenses paid in priority.

5. Switzerland Direct action against Fernandez • Direct claim of Fraudella (or its insurer) against Fernandez governed by the laws of Florida (Art. 121 & 133 PIL). • As Fernandez is a non resident, possibility to obtain an attachment order pursuant to Art. 271 DEB against his identified assets in Switzerland, but only in respect of claims connected to Switzerland (fraudulent loan to Swiss company). Attachment in respect of other claim only if it can be proved that he has no domicile or has fled. • Florida judgment against Fernandez could be enforced in Switzerland (Art. 149 PIL).

6. Switzerland Criminal proceedings • Jurisdiction in respect of fraudulent loan granted to Swiss company, as well as any assets laundered through Swiss banks or companies. • Criminal complaint does not require any advance fee. • Freezing orders can be issued by a Swiss magistrate within 24 hours of the lodging of the complaint, based on suspicion of existence of assets beneficially owned by Fernandez. • Banking secrecy not opposable. • Frozen assets must be forfeited in favor of the uncompensated victim of the crime, who has priority over other creditors. • Party status (party suing for damages) and access to file for the direct victim(s) of the crime. Documents may be used in support of other proceedings, in Switzerland or abroad. • No party status for subrogated insurer or fully compensated victim. Consequence: cooperation agreement between Fraudella and its insurer required.