[BANKRUPTCY, INSOLVENCY & REHABILITATION PROCEEDINGS IN PORTUGAL] 72
5. Insufficiency of seizable assets to pay the respective claim in enforcement proceedings brought against the debtor; 6. Non-compliance with obligations set out in an insolvency or payment plan; 7. General non-compliance, in the previous six months, with debts of any of the following types: i) tax; ii) social security contributions and dues; iii) debts arising from an employment contract, or breach or termination of such contract; iv) payments for any type of lease, including financial leases, payments of the purchase price or of a loan guaranteed by a mortgage, with respect to the place where the debtor carries out his activity or has his registered office or residence; 8. Should the debtor be a legal person, where it has greater liabilities than assets as shown on the last approved balance sheet or is behind by more than nine months in the approval and filing of accounts, if legally required to do so. The application submitted by a creditor must include information regarding the nature and amount of the credit, the identification of the debtor’s managers (both of fact and law) and its five biggest creditors (not including the applicant), and the debtor’s commercial registry certificate. If the applicant is the debtor, then it is important to indicate whether the company’s situation of insolvency is current or imminent, and to include documents, such as a list of all known creditors and a clear explanation of the company's activity over the last three years and is also required to include with the initial petition for insolvency, a document identifying the companies with which it is in a control or group relationship under the terms of the CSC or which are considered associated companies, and, if applicable, identifying the processes in
which its insolvency is requested or has been declared. The judicial ruling which then declares the insolvency of the debtor grants creditors – as well as the Public Prosecutor Department – a fixed time limit (maximum 30 days) to claim their credits (including conditional credits) before the Insolvency Administrator (filed online). Creditors must lodge their claim accompanied by various documents and elements that legitimize and ground the claim, such as the origin of the credit and its legal classification (e.g., guaranteed or privileged), and its due date, amount and accrued interest. Creditors who have had their credit acknowledged by a previous judicial decision are not exempt from the duty of claiming it in the insolvency proceeding if they wish to obtain payment within said insolvency proceeding. After said time limit has expired, the Insolvency Administrator will assess whether the credits are to be acknowledged. The declaration of insolvency is registered in the land, commercial and vehicle register in respect of the assets or rights forming part of the insolvent estate. Within 15 days of the termination of the time limit for credit claims, the Insolvency Administrator prepares a list of the credits that were legally acknowledged (which is published), as well as the respective terms and conditions of each one (e.g., the identification of the creditor, the nature of the credit, the amount and accrued interests, and the existence of personal or real guarantees, amongst others). In parallel, another list comprising the credits that were not acknowledged, and the respective grounds of justification, must also be drafted and published. Within ten days of the deadline for the Insolvency Administrator to present these lists, any person with a legal interest can challenge
ILN Restructuring & Insolvency Group – Bankruptcy, Insolvency & Rehabilitation Series
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