The collapse of Bank Hottinger leaves a lot of losers in its trail, shareholders, employees, customers. As always, there's one winner: the liquidator. His compensation will most likely do away with any remaining assets.

After more than two centuries in business, this week marked the end, Bank Hottinger collapsed. The significance in simple monetary terms: After reimbursing the customers and paying for the costs of liquidating the company, any remaining cash and assets will be paid out to creditors and shareholders.

Swiss financial market regulator Finma appointed Karl Wüthrich (pictured) and Brigitte Umbach-Spahn of law firm Wenger Plattner as liquidators.

Not Much Left

The sad end of the demise of Hottinger will leave the owners empty handed. Their won't be much left to take home, because capital and provisions fell so low that they didn't meet the minimum requirements set by Finma.

The minimum defined was about 10 million francs and couldn't be guaranteed by Hottinger. The fees charged for the liquidation meanwhile are very high and will have to be paid for by the remaining assets.

Star Liquidator of Swissair Fame

Finma appointed the star of the guild of liquidators to deal with the Hottinger case: Karl Wüthrich. The attorney has 30 years of experience and attracted the limelight as liquidator of Swissair. He sued Philipp Bruggisser, Mario Corti and and a string of managers from the collapsed airline, seeking compensation to the tune of hundreds of millions of Swiss francs.

The lawsuit failed, but Wüthrich remained unscathed. His career took off and the 62-year-old was involved in most big bankruptcies in Switzerland over the past years: ISL sports marketing, Petroplus oil refinery and Prime Forestry Group.

Handsomely Paid

Wüthrich and Umbach-Spahn, who also worked on the Swissair liquidators team, are now taking on Hottinger – and they will be paid handsomely. Attorneys earn top salaries. This was made public in the liquidation of Medibank from Zug, as finews.ch reported.

Finma also appointed Wenger Plattner to liquidate Medibank. But the company opted for a voluntary liquidation, partly because of the fee charged by Wenger Plattner: 11,400 francs a day.

The Medibank board did the arithmetics and concluded that a liquidation by Wenger Plattner would have swallowed most of its capital, leaving a much lower amount to the shareholders.

Finma Has No Other Option

Bank Hottinger won't be able to do the same. The necessary capital isn't available to undertake a voluntary liquidation and Finma's verdict is final.

The regulator from Bern knows that the costs for a liquidation are very high. However, Finma can't change the rules, which stipulate the liquidation is paid out of the capital available, despite the fact that the protection of creditors is its objective.

Finma is selecting the liquidators. Wenger Plattner is often used, but Finma also works with competing firms. Some of these charge even more than Wenger Plattner.