Grovlåsning

Grovlåsning, often translated as "gross lock-up" or "lock-up," is a term used in Swedish legal and financial contexts to describe a situation where a company or an individual is unable to meet their financial obligations. It signifies a severe liquidity crisis where assets are insufficient to cover debts as they fall due. This can lead to insolvency.

The concept of grovlåsning implies a fundamental inability to function financially. It is distinct from temporary cash flow issues. When grovlåsning occurs, creditors may initiate legal proceedings to seize assets to satisfy outstanding debts. This can ultimately result in bankruptcy proceedings.

In a corporate context, grovlåsning can have widespread consequences, impacting employees, suppliers, and shareholders. The company's operations may cease, and its assets will be liquidated to pay off creditors. For individuals, it means facing severe financial distress, with potential loss of property and significant credit damage.

Swedish law has provisions to address situations of grovlåsning. The Swedish Companies Act (Aktiebolagslagen) requires that if a company's equity is endangered, a shareholders' meeting must be convened to consider measures. If the company is in grovlåsning, the board has a duty to act to protect creditors. The term highlights the seriousness of a company's financial state, signaling a point of no return for its financial viability.