Facts

The Klaro GmbH, a company registered in the commercial register of the Canton of St. Gallen with its registered office in Buchs, was founded on 27 July 2001. Its corporate purpose included the trading of goods, planning and development of hardware, software and communication technologies, as well as financial transactions on its own CO on behalf of third parties. The share capital of CHF 20,000.- was provided by the Trans-American Investment Banking Institute Incorporation (USA), with X. acting as founding shareholder and managing director (with sole signing authority) and Y. as another managing director (with joint signature).

From November 2003, Klaro GmbH marketed a financial product under the name "AmoFin", under which it guaranteed the refinancing of a third party's investment sum (including a "premium" of 8-10% of the investment amount) within two years. To finance this activity, it speculated with part of the funds received on a foreign exchange platform via an internet platform. By 10 April 2004, the company had received a total of CHF 1.42 million.

The Swiss Federal Banking Commission (SFBC) issued a ruling on 7 June 2004 finding that Klaro GmbH had breached the prohibition on the commercial acceptance of public deposits (Art. 1 para. 2 BankA, Art. 3a BankO) and ordered its dissolution and immediate liquidation. At the same time, it withdrew the authority to represent the company from X. and Y., appointed Transliq AG as liquidator and froze all of the company’s assets. The SFBC also granted the liquidator the authority to collect an advance on costs and set the procedural costs at CHF 10,000.-.

X. and Klaro GmbH filed an administrative court appeal against this ruling on 9 July 2004 (2A.399/2004). The Presiding Judge of the Federal Supreme Court rejected the application for suspensive effect but limited the liquidator’s activities to protective and value-preserving measures. On 19 August 2004, the SFBC declared bankruptcy over Klaro GmbH (2A.466/2004), appointed Transliq AG as bankruptcy liquidator and declared the effects of the ruling of 7 June 2004 to be terminated. X. and Klaro GmbH filed another appeal and requested the annulment of the bankruptcy proceedings and the appointment of a different bankruptcy liquidator.

The Federal Supreme Court dismissed both appeals to the extent that it had jurisdiction to rule on them. It also examined the question of the standing of the sole shareholder X. and the cost implications of the proceedings and rejected applications for free legal aid for the legal entity.

Considerations

1. Right to appeal and party status

The Federal Supreme Court first examined the right to appeal of the appellants. It found that Klaro GmbH, as the affected company, was affected in its own protectable interests by the SFBC’s ruling and was therefore entitled to appeal. The organs of a company placed in liquidation remain entitled to challenge the corresponding decision, despite the withdrawal of their authority to represent the company, provided they act on behalf of the company. X., as managing director with sole signing authority, was entitled to file the appeal on behalf of Klaro GmbH. However, the appeal filed by X. in his own name was dismissed for lack of a protectable interest, as he could have brought the matter before the Federal Supreme Court through the company.

2. Applicability of banking law and proportionality of the measures

The SFBC was entitled to order the supervisory liquidation of Klaro GmbH as it had unlawfully accepted public deposits on a commercial basis. The company did not meet the requirements for an exception under Art. 3a para. 3 BankO, as the funds received did not constitute consideration for a contract CO settlement accounts within the meaning of the provision. The measure was proportionate, as a subsequent granting of a licence was ruled out and the company’s organs were overburdened. The SFBC was also entitled to liquidate the entire business operations, as the financial transactions constituted the main part of the activities and it was not possible to separate the business purposes.

3. Bankruptcy proceedings and over-indebtedness

The declaration of bankruptcy over Klaro GmbH was lawful as the company was over-indebted. The interim balance sheets as of 31 December 2003, 31 March 2004 and 9 June 2004 showed over-indebtedness, which was…