In october 2014 the law N°20:720 was enacted “replacing the actual concursal system by a new law of reorganization and liquidation of companies and persons assets , improving the role of the institution that oversights the process, Superintendency of Insolvency and re-entrepreneurship , Superintendencia de Insolvencia y Reemprendimiento.
This law puts emphasis in the reorganization of viable companies , creating procedures for reestructuring their debts, keeping the company as a productive unit and job generator. One of the great novelties that incorporates this law is the possibility to renegotiate the natural persons or not comercial debtors debts, and to give them a fast execution of their goods. Also the creation of the Superintendencia of insolvency and re-entrepreneurship , Superintendencia de Insolvencia y Reemprendimiento, with presence all over the country and it’s regions, that replaces the Bankruptcy Superintendence.
The current bankruptcies in court , arrangements and assignments of property that are being processed and the ones that start before the validity of the law will be ruled by the dispositions of the Commerce Code, Book IV, Libro IV del Código de Comercio.
Scope of Application of the new Bankruptcy Law
It will be applied to the concursal proceedures meant to reorganize and liquidate the assets and liabilities of a debtor company, and to renegotiate the assets and liabilities of a debter natural person.
New Authorities
The new law of insolvency and re-entrepreneurship changes the main characteristics of the former law. Also, it includes new authorities and actors:
1.- Veedor, Viewer: Natural person under the supervision of the Superintendence of Insolvency and re-entrepreneurship, which mission is to reach the agreements between the debtor and his creditors, to supply the propositions of Agreements of Judicial Reorganization and to keep the interests of the creditors, requiring the precautionary measures and conservation of the debtor’s assets, according to what is said in the law.
Their faculties are similar as the ones the Receiver or Síndico had with the former law in the agreemente that tried to avoid or put an end to the bankruptcy. Now the main objective of the Concursal Proceedure of Reorganizaion is to restructure the liabilities and the assets of a debtor company, in which the liquidation of their assets has not been done.
2.- Liquidador/Liquidator: Natural person under the supervision of the Superintendence of Insolvency and re-entrepreneurship, which main mission is to realise the assets of the Debtor and try to do the payment to the creditors. This new actor, the Liquidator, will replace the functions of the former Receiver of Bankruptcy or Síndico de Quiebras.
3.- Martillero Concursal /Concursal Auctioneer : Public Auctioneer that voluntarily subjects to the supervision of the Superintendence of Insolvency and re-entrepreneurship, which main mission is to realise the assets of the Debtor, according to what is agreed by the Creditors Commitee and this law.
4.- Deudor/Debtor: In order to avoid the stigmatizacion that the baknruptcy process leads, the new law no longer applies the concept of Failed , being replace by Debtor, this includes every Debtor Company or Natural person, depending on the concursal proceedure that is being done .
5.- Empresa Deudora/ Debtor Company: Every private legal person , for-profit or non-profit , and every natural person that pays the First Category Tax ,Impuesto de Primera Categoría or the ones that are in the number 2 of the article 42 of the decree law N° 824, of the Ministry of Finance, from 1974, that aprooves the income tax law.
6.- Persona Natural Deudora/ Natural Person Debtor: Every natural person not comprehended in the definition of Debtor Company