Reorganization as a means of financial restructuring

The Reorganization is a procedure incorporated in our legislation through Law 20,720. This law, also known as the Insolvency and Re-Entrepreneurship Law (or New Bankruptcy Law) contemplates new procedures and updates others, giving them a more modern approach and directed towards the Debtor rather than towards Creditors.

Despite the multiple advances that this law presented in our legal system, today we will refer in particular to one that is positioned as a tool for restructuring our assets and liabilities seeking to make a business sustainable over time.
Unlike a liquidation procedure for assets such as bankruptcy, today known as Liquidation, Reorganization is a procedure that assumes that the applicant company is a long-term sustainable company and that, under certain circumstances, it is currently undergoing a crisis that does not allow you, for example, to pay your debts in an orderly manner. In simpler terms: it is a troubled company in the short term but prosperous in the medium and long term.

And although it may seem strange at a first approach, in truth it is not so much, just think about it: how many times have you not been able to collect all the documents at your disposal, for various reasons, and now you are going through a bad time which you know, for the future projection of flows, that if it exceeds it, will it be able to continue operating in the market, maintaining its livelihood and that of its workers? What has been explained in a very simple way is what an entrepreneur or a board of directors, together with their financial and legal advisors, should consider to determine if this procedure is applicable to their business.

This procedure, which is regulated in its development in the Insolvency and Re-Entrepreneurship Law, seeks that the business structure can be maintained over time, making certain adjustments through an external advisor (called Veedor) who will seek to give that return nut that your business needs to project itself over time, maintaining itself and, above all, giving it a new stability that allows it not to disappear through another of the procedures of Law 20,720 that we will explain on another occasion.

At Sottolichio & Aguilera Abogados we have experience in these matters: consult, schedule a face-to-face or virtual meeting, and let’s talk about how we can help you in your business.