Published on 11th January, Law 9/2022 establishes measures to increase the efficiency of procedures concerning enterprise restructuring and payment arrangements and transposes Directive (UE) 2019/1023.
Published on 11th January, Law 9/2022 establishes measures to increase the efficiency of procedures concerning enterprise restructuring and payment arrangements and transposes Directive (UE) 2019/1023. This diploma introduces changes to a variety of national laws like the Insolvency and Corporate Recovery Code (CIRE), Code of Commercial Companies and the Real Estate Registry Code.
The modifications to CIRE specially stand out, namely where restructuring and insolvency proceedings are concerned.
The application for a restructuring plan must include a proposal for the division of creditors into groups, in accordance with the nature of their credits, and seeking to contain creditors with comparable claims. Micro, small and medium sized enterprises are excluded from this obligation.
Additionally, enterprises should benefit from a temporary stay of individual enforcement actions granted by the judicial authority when amid a restructuring proceeding, for a maximum period of 4 months, with the possibility of an additional month, if the situation in question meets any of the legal requirements. However, the individual enforcement actions concerning recovery of workers’ claims are excluded from this framework.
This diploma also establishes that ipso facto clauses, which refer to negotiations on a restructuring plan or a stay of individual enforcement actions or any similar event connected to the stay, can’t be invoked.
The standards for the content of a restructuring plan are broadened, requiring more information and organisation. The court-appointed administrator must deliver a reasoned opinion concerning the viability of the plan, along with the creditors’ voting results for the adoption of the plan. Overall, the judicial authority has a greater involvement in the proceedings, ultimately deciding the approval or non-approval of the plan according to the legal criteria.
In situations where the court-appointed administrator declares the company’s insolvency, the court must notify the company so they can object it. In this case, the restructuring proceeding is terminated.
This legal framework also grants additional protection to creditors who finance a company during the restructuring proceeding and clarifies that any court’s decision appointing an administrator cannot be appealed.
Regarding insolvency proceedings, claims held by people specially related to the debtor are established as subordinated. Compulsory partial assessments are also introduced as well as the compulsory registration of the declaration of insolvency in the commercial and vehicle registries, in addition to the land registry, concerning goods or rights embedded in the insolvent estate.
The period which precedes a full discharge of debt is reduced from 5 to 3 years with the possibility of being extended in case of the debtor’s failure to comply with obligations and when there is a strong probability that they will comply in the additional period.
This law enters into force 90 days after its publication, on 11th April 2022. According to the transitional regime, it is immediately applicable to the pending proceedings at that date, apart from Articles 17º-C to 17º-F, 17º-I and 18º of the CIRE.