[BANKRUPTCY, INSOLVENCY & REHABILITATION PROCEEDINGS IN PORTUGAL] 79
iv.
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.
vi. If applicable, that the new financing necessary to implement the restructuring plan does not unfairly harm the interests of the creditors; vii. Whether the rescue plan holds out reasonable prospects of preventing the insolvency of the company or ensuring its viability. 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 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
v.
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; iii. 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; iv. 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; v. 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 this ground;
ILN Restructuring & Insolvency Group – Bankruptcy, Insolvency & Rehabilitation Series
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