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The Revitalisation Proceeding

I. In 2012, the CIRE was modified[1] and the revitalisation proceeding was introduced in Portuguese insolvency law.

The revitalisation proceeding pursues the recovery of the debtor, by means of an agreement with the creditors. It may be used by companies or by individuals.

This special proceeding is ruled by the CIRE (by new Articles 17-A to 17-I and subsidiarily by the rules concerning the insolvency proceeding); when necessary Civil Procedure Code applies.

II. The revitalisation proceeding begins with the requirement of the debtor and the declaration of, at least, one of the creditors in order to initiate the negotiations looking for the plan of recovery (Article 17-C(1)); the court appoints a provisional judicial administrator (Article 17-C(3)(a)).

According to Article 17-E(1), the revitalisation proceeding hinders any claim to collect debts against the debtor and, during the negotiations with the creditors, suspends any existing claim against him with the same object. On the other hand, the debtor is not allowed to perform, without consent of the provisional judicial administrator, “acts of special relevance” to the insolvency proceedings (Article 17-E(2)), such as: the sale of the enterprise or of the place of business; the sale of the assets necessary to the continuity of the exploration of the enterprise; the sale of shares in other companies; the acquisition of immovable property; the conclusion of long term contracts; the assumption of obligations of third parties or the creation of security interests (Article 161(2)).

If the negotiations come to an end with the approval by the creditors of the plan of recovery and revitalisation of the debtor, that plan shall be submitted to the court for confirmation or refusal. The decision of the court is binding to the creditors, even if they have not taken part in the negotiations (Article 17-F).

If the debtor or the majority of the creditors conclude that it is not possible to attain an agreement on the recovery of the debtor, the negotiations terminate and the provisional judicial administrator reports the fact to the court (Article 17-G(1)). In cases where the debtor is not yet in an insolvency situation, the closure of the revitalisation proceeding results in the extinction of all its effects; in cases where the debtor is in an insolvency situation, the closure of the revitalisation proceeding results in the insolvency of the debtor, which will be declared by the court in a short time (Article 17-G(2) and (3)).

The closure of the revitalisation proceeding, as ruled in these special provisions of the CIRE, prevents the debtor from using the same proceeding for a period of 2 years (Article 17-G(6)).

  • [1] By Lei 16/2012, 20.04.2012.
 
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