[BANKRUPTCY, INSOLVENCY & REHABILITATION PROCEEDINGS IN PORTUGAL] 70
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Whether, in the case of classification of creditors into separate classes, the dissenting voting classes of creditors affected receive treatment at least as favourable as that of any other class of the same rank and more favourable than that of any class of lower rank; That no class of creditors may, under the plan of reorganisation, receive or retain more than the amount corresponding to the totality of their claims; Whether the situation of the creditors under the plan is more favourable than it would be in a scenario of liquidation of the company, if there are requests for non-approval on these grounds; If applicable, that the new financing necessary to implement the restructuring plan does not unfairly harm the interests of the creditors; Whether the rescue plan holds out reasonable prospects of preventing the insolvency of the company or ensuring its viability.
the plan’s ratification in the same terms described above. These shorter proceedings may be concluded (upon the final ratification decision) within two to four months on average. Regular proceedings last around six to eight months. Ratification (or non-ratification) of the recovery plan may be contested through a single appeal to an appeal court (whose decision is final), based on formal or material grounds. Upon the ratification of the recovery plan, the debtor and all creditors (including non-voting, unknown creditors, creditors that have not claimed or have contingent claims regarding facts that occurred on or prior to the PA’s appointment) are bound to its terms. If the recovery plan is not approved, the PA shall communicate the end of negotiations and give an opinion on whether the company is insolvent. If the company is deemed to be insolvent by the PA, the PER is extinguished, and insolvency proceedings are initiated (three business days). If the PER is extinguished the debtor cannot initiate a new PER for the next two years. These proceedings are not confidential, being available for consultation by interested parties. The main decisions regarding the proceedings are made public. After the appointment of the PA, any pending enforcement proceedings filed against the debtor shall be suspended, for a period of four months, extendable by one month, and no further proceedings shall be filed for the same purpose after such date (except for claims related to labour credits). The company shall continue to operate its business, under the PA’s supervision. The PA’s prior written authorization is required for “acts of special importance”, without that approval the transactions have no effect.
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In the absence of approval of a restructuring plan and when the provisional judicial administrator issues an opinion concluding that the company is insolvent, the company shall have a period of five days to oppose it. Alternatively, the PER may follow a shorter form, being initiated by the presentation of an extrajudicial recovery agreement (signed by the debtor and creditors representing the majority referred to above for the plan’s approval), with all ancillary documents. In such cases, following the PA’s appointment and the notification of non-subscriber creditors for oppositions to the provisional creditors list, the judge decides on
ILN Restructuring & Insolvency Group – Bankruptcy, Insolvency & Rehabilitation Series
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