Initiative to Speed Up Insolvency Processes

A bill being discussed in the Costa Rican Assembly aims to accelerate and simplify the processes followed by companies when they request to be declared in a state of insolvency or bankruptcy.

Thursday, December 19, 2019

Currently in the country there are two liquidation processes, which are bankruptcy and insolvency, in addition to two others in which "...the debtor makes proposals to creditors to reach a solution, which are the administration and reorganization with judicial intervention, exclusively for companies, and the preventive agreement, for companies and individuals."

With the bill, the intention is to unify the different legislations that exist in the matter in order to simplify the process, since the fact that the subject is dispersed in different laws and regulations, "... does not help the debtor to recover and the creditors recover little."

The report of details that "... According to information provided by the statistics sub-process of the Planning Directorate of the Judiciary, in 2018, 210 cases of individuals or companies with applications in the Bankruptcy Court were filed, a much higher number than the 69 cases filed in 2017, 54 in 2016 and 46 in 2015."

More on this topic

A Bankruptcy Law for Panama

January 2016

The recent bankruptcy of RG Hotels and its impact on the market have once again put on the table the need for a legal framework to allow for orderly restructuring or settlement of failed companies.

A bill providing an adequate legal framework for companies facing financial difficulties that would allow them to be reorganized without having any adverse effects on third parties is one of the proposals that the Banking Association of Panama has been trying to bring to fruition for years, without success. The effects still being felt by companies and investors from the bankruptcy of RG Hotels reflects the need to promote legislation, which "... would be supported by the banking regulator, Ricardo Fernandez, Superintendent of Banks of Panama, who also confirmed an interest in the subject to ANPanamá. "

Request for Bankruptcy Law in Panama

June 2013

One such example is the request by the developer of the Trump Ocean Club to make use of Chapter 11 of the U.S. bankruptcy code, in order to restructure its debt.

"Chapter 11 is a vital tool for businesses to survive and move forward. If it had existed in Panama, it would have been brought to light in Panamanian law.

Bankruptcy Bill in Guatemala

February 2013

At the moment there are no precise rules for bankruptcy processes, and it is common that the failed company carries on operating under another name.

A new bill in Guatemala is proposing that there be a clear and organized processes when a company faces bankruptcy in order to protect investment.

Guatemala: Proposal for Bankruptcy Law

March 2011

The Foundation for the Development of Guatemala has proposed to Congress the creation of regulations governing the bankruptcy process.

A study presented by Fundesa claims that while the Commercial, Criminal and Civil Codes regulate bankruptcy, there are still loopholes.