Extras din document
Preconditions to a workout
Significant amount of debt owed to variety of large creditors (banks)
Present or imminent inability to service the debt
Acceptance of principle that workout may be preferable
Relatively sophisticated refinancing, security and other commercial techniques
Swift and effective resort to bankruptcy if workout fails
Greater benefit to all parties from negotiation process
Commencement of negotiations
Coordination of creditors – lead creditor and steering committee
Assuring adequate cash flow and liquidity
New financing may be required
Full disclosure of information by the debtor
Treatment of other creditors
Payment in full
“Take it or leave it” offer
Threat of cram-down
Mandat ad Hoc - France
Annual reporting to the Commercial Court
Court knows in advance which businesses are in financial difficulty
Executives may be called in for consultation with president of the court – 611-2
“Experiencing difficulties of such a nature as to compromise the continued operation of the business”
Mandat ad Hoc - France
If executives do not appear, court may obtain information from other sources
E.g., auditors, employees, etc.
Mediator may be appointed to work out agreement with management and creditors
Automatic stay while performing agreed workout
Terminates upon commencement of more formal insolvency procedure
Replaced bankruptcy “act” of 1898
Three 19th century statutes
Each lasted very short time
All but Code enacted in time of economic crisis
Chapters 1, 3, 5 – general
Chapter 7 – liquidation
Chapter 9 – municipal reorganization
Chapter 11 – business reorganization
Chapter 12 – family farmers (currently not in force)
Chapter 13 – consumer reorganizations
Chapter 15 – Model Law on Cross-Border Insolvency
Choose type of case at time of filing
Law adopted in 1994 – effective in 1999
Decision to reorganize likely would come at “report meeting” of creditor assembly
Debtor may propose plan at any time, but not after final creditors’ meeting
Typically filed with application to open insolvency proceedings
Default is liquidation – G 159
3-month delay between filing and opening
Fund pays salaries for 3 months after filing, but before opening
Plan may be filed with application to open case – debtor plan
Can invoke self-administration
Right to separation of assets, or claim to separate satisfaction – secured claim
Committee may be appointed in all cases
Conținut arhivă zip
- 1 Introduction.pptx
- 2 Insolvency Law Features.pptx
- 3 Eligibility, Commencement, Moratorium.pptx
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