Concordat is a way for the debtor (usually a company) in financial difficulty to avoid bankruptcy and restructure its debts. With Law No. 7101, bankruptcy was strengthened instead of postponement.
Types
- Ordinary concordat: Partial payment/postponement of debts
- Concordat with abandonment of assets: Leaving all assets to creditors
- Concordat within bankruptcy: Bankruptcy. after
Process
- Debtor, application to the commercial court of first instance (request for temporary respite)
- Temporary respite (3 months + 2 months)
- Definite respite (1 year + 6 months + 6 months)
- The concordat project is presented to the creditors
- Voting at the creditor meeting (2/3 + receivable half)
- Court confirmation decision
- Implementation
Advantages (for the Debtor)
- Enforcement proceedings stop
- The company continues its activities
- Structured payment plan
Appointment of Commissioner
The court appoints a concordat commissioner. The commissioner inspects the debtor and informs the creditors.
Supreme Court 23rd HD and 19th HD
23. HD adopts that concordatum is a rescue tool for the "bona fide debtor", and that the grace period should be lifted when malicious use (smuggling of goods, fake creditors) is detected.