[BANKRUPTCY, INSOLVENCY & REHABILITATION PROCEEDINGS IN PORTUGAL] 69
non-approval scenario). The recovery plan approved by the creditors and ratified by the court is binding for all parties, including creditors that have not claimed credits and creditors that did not participate in the negotiations or voted against the plan. The plan’s approval requires a vote of creditors through three systems of majority formation: 1. Applicable to cases in which there is classification of creditors in distinct categories (large companies): the rule of the favourable vote, in each of the categories of creditors, of more than 2/3 of the total votes cast (abstentions are not considered as such); 2. Applicable to all other cases (micro, small and medium enterprises): rule of approval of the plan which, being voted by creditors whose credits represent at least 1/3 of the credits related to voting rights (abstentions are not considered), obtains the favourable vote of (i) more than 2/3 of the total votes issued and (ii) more than 50% of the votes issued corresponding to non-subordinated credits related to voting rights. ; 3. Applicable in all cases (whatever the size of the company): approved the plan that collects cumulatively (without considering abstentions) the favourable vote (i) of creditors whose credits represent more than 50% of the total credits related to voting rights and (ii) of more than 50% of the votes issued corresponding to non- subordinated credits related to voting rights. The recovery plan must include the following mandatory information: i. The parties affected by the plan, designated individually and broken down by classes in general terms or, if applicable, by categories, and the
amounts of their respective claims or interests covered by the plan; The parties, designated and apportioned pursuant to the preceding paragraph, that are not affected by the plan, together with a description of the reasons why the proposed plan does not affect them; The arrangements for informing and consulting employees' representatives, the position of employees within the undertaking and, where appropriate, the general consequences as regards employment, such as dismissals, temporary reduction of normal working hours or suspension of employment contracts; Any new funding envisaged and the reasons why such new funding is necessary to implement the plan; A statement of reasons containing a description of the causes and extent of the company's difficulties and explaining why there is a reasonable prospect that the recovery plan will prevent the company from becoming insolvent and ensure its viability, including the preconditions necessary for the plan's success.
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In the judgment of approval or non-approval of the restructuring plan, the judge must necessarily assess: i. Whether the recovery plan has been approved (i.e., whether the majorities provided for by law have been respected); ii. If, in the event of classification of creditors in different categories, creditors in the same category are treated equally and in proportion to their claims;
ILN Restructuring & Insolvency Group – Bankruptcy, Insolvency & Rehabilitation Series
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