[BANKRUPTCY, INSOLVENCY & REHABILITATION PROCEEDINGS IN PORTUGAL] 73
the acknowledged creditors list. The court will then issue a ruling, in which it decides on the existence and correct classification of the credits. The credits whose verification or graduation requires the production of further evidence will now be provisionally verified and graduated in provisional order, instead of relegating the graduation of all credits to the final judgment when the verification of some of them requires evidentiary steps. The aim is thus to simplify the conduct of the phase of verification of liabilities and graduation of claims. Despite this, a creditor may still have other claims acknowledged after this period, and may request the separation or restitution of assets, to be considered in the insolvency proceeding, by means of a judicial application against the insolvent estate. The request for the separation or restitution of assets can be filed at any time until the end of the insolvency proceeding. However, the claim for the acknowledgement of credits can only be filed within six months of the judgment declaring the insolvency becoming final. These credits may be traded amongst creditors and with third parties prior to, or even throughout, the insolvency proceedings, as the only impact that this action has on the claim is the identification of the creditor. All pending judicial proceedings regarding the insolvency estate assets filed against the debtor or even third parties, which may determine variations in the value of the insolvency estate, and all judicial proceedings with exclusive patrimonial nature filed by the debtor are to be attached to the insolvency proceeding if the Insolvency Administrator so requests. Enforcement proceedings or other measures requested by the insolvency creditors that affect the insolvency estate, as well as arbitration disputes, shall be suspended.
Furthermore, one of the consequences of the declaration of insolvency is the immediate removal of the (debtor) managers’ powers of administration over the assets of the insolvency estate and their subsequent transfer to the Insolvency Administrator, who is authorized by law to carry out all transactions in the ordinary course of business of the debtor. As a rule of thumb, under article 102 of the CIRE, contracts that have been entered between the debtor and a creditor, and that have not yet been completely performed, are suspended until the Insolvency Administrator determines on their performance or non-performance. In these cases, the respective creditor is given the opportunity to set a reasonable date before which the Insolvency Administrator must issue a decision. If no decision is made by said date, then Portuguese law presumes that the Insolvency Administrator has decided not to perform the contract. II. 2. AGGRAVATED/CULPABLE INSOLVENCY Once a court makes a declaration of insolvency, the insolvency may be deemed to be fortuitous or aggravated/culpable (where insolvency is a result of a willful or gross negligence action of the debtor’s or of it’s in legal directors within the three years prior to the beginning of insolvency proceeding). The law provides for circumstances where (i) insolvency is automatically classified as negligent; and (ii) where fraud or gross negligence is presumed. For the purposes of qualifying the insolvency as culpable, Law no. 9/2022, of 11 January, clarified that the presumption of serious fault of the de jure or de facto administrators of the debtor who are not natural persons who fail to comply with the duty to request the declaration of insolvency or the obligation to prepare, submit to supervision or deposit the annual accounts is limited to the existence of seriously culpable behavior.
ILN Restructuring & Insolvency Group – Bankruptcy, Insolvency & Rehabilitation Series
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